An Exploration of Japan’s Entrepreneurship Development and Overseas Dispatch Program
Introduction
In October 2023, a delegation of Japanese entrepreneurs and members of the impact startup ecosystem made their way to San Francisco to attend the renowned SOCAP23 social entrepreneurship conference. This annual event brings together investors, entrepreneurs, and social impact leaders with the aim of solving some of the world’s toughest challenges through market-based solutions. The participation of Japanese impact companies at SOCAP23 highlighted the growth of impact investment in Japan and showcased the innovative solutions Japanese startups are bringing to the table. This article delves into the Japanese delegation’s experience at the SOCAP23 conference, the government support they received through the J-StarX program, and the broader impact startup movement in Japan.
The J-StarX Program: Fostering Global Entrepreneurs
Early in 2023, Japan’s Ministry of Economy, Trade and Industry (METI) launched the J-StarX program, an entrepreneurship development and overseas dispatch initiative. The primary goal of J-StarX is to produce entrepreneurs with an international presence by providing them with opportunities to connect and learn from business leaders around the world. In October, 20 companies were selected to participate in the program and receive concentrated support. This initiative reflects Japan’s commitment to fostering a thriving startup ecosystem and promoting global entrepreneurship.
Japanese Impact Startups Take the Stage
At the SOCAP23 conference, five Japanese impact startups had the opportunity to introduce their companies and pitch their ideas to potential investors and business partners. These startups are driven by a desire to solve social and environmental issues while ensuring economic viability. Each business aims to address a unique social challenge, showcasing the diversity and innovation within the Japanese impact startup scene.
AiCAN: AI-powered Support for Child Abuse Responses
One of the standout startups at SOCAP23 was AiCAN, which provides artificial intelligence (AI) services to support responses to child abuse. Led by CEO Kota Takaoka, AiCAN aims to make the world a safer place by finding solutions to combat child abuse. Takaoka’s pitch resonated with the audience, highlighting the importance of leveraging technology to tackle deeply rooted social issues.
TBM: Promoting Environmental Sustainability through New Materials
TBM, another Japanese impact startup, focuses on promoting environmental sustainability through the use of new materials made from limestone and material recycling. By tackling environmental problems head-on, TBM aims to contribute to a greener future and create a positive impact on the planet.
EF Polymer: Addressing Farmland Drought with Superabsorbent Polymer
EF Polymer takes on the challenge of farmland drought by utilizing a naturally derived superabsorbent polymer. This innovative solution aims to alleviate the water scarcity issues faced by farmers, ultimately contributing to the sustainable development of agriculture in Japan.
Dots for: Transforming Rural Areas in Africa Through Digitalization
Dots for has set its sights on transforming rural areas in Africa through digitalization. By leveraging technology and connectivity, this impact startup aims to bridge the digital divide and empower communities in rural Africa, opening up new opportunities for growth and development.
Ashirase: Empowering the Visually Impaired with Navigation Technology
Ashirase is a Japanese impact startup that has developed a navigation system to help people with visual impairments walk independently. By utilizing innovative technology, Ashirase aims to improve the mobility and independence of visually impaired individuals, promoting inclusivity and accessibility.
Government Support and the Five-Year Plan for Startup Development
Katsuji Imata, president of the Social Impact Management Initiative (SIMI), highlighted the growth of impact investment in Japan and discussed the government’s support through the J-StarX program. He also shed light on Japan’s five-year plan for startup development, emphasizing the importance of comprehensive support measures for impact startups. The Japanese government recognizes the significance of programs and initiatives that support the survival and expansion of startups, providing financial support, tax credits, and benefits.
Sarah Sterling, executive director of entrepreneurship at SOCAP Global, praised the Japanese government’s commitment to supporting startups and social entrepreneurship. She acknowledged the value of programs like J-StarX and the impact they have in fostering innovative solutions to address challenging social issues.
The Impact Investment Landscape in Japan and Globally
The global impact investment market has experienced significant growth in recent years. Impact investing, which focuses on addressing specific social issues while optimizing investment returns, has gained traction worldwide. In Japan, impact investing has seen exponential growth, with the balance of impact investment reaching $39 billion (approximately 5.85 trillion yen) at the end of March 2022, a four-fold increase from the previous year.
The Japanese government has been proactive in promoting impact investing. Keidanren, Japan’s influential business lobby, released a report titled “Using ‘Impact Indicators’ to Promote Purpose-Driven Dialogue” in June 2022, and the Impact Startup Association was launched later that year. As a result, enthusiasm for impact investing has been growing in Japan, with more companies seeking to obtain B Corp Certification and align their values with social and environmental responsibility.
According to a report by the Global Impact Investing Network (GIIN), the global impact investment market size reached nearly $1.2 trillion in 2022, representing a tenfold increase from 2017. This growth reflects a global shift towards responsible investing and the recognition of the positive impact investments can have on society.
The Takeaways: Connecting and Building Resilient Communities
The Japanese entrepreneurs who attended the SOCAP23 conference had the opportunity to connect with global investors and potential partners. The networking aspect of the event proved invaluable in fostering collaborations and advancing their businesses. Kunihiko Ono, CEO of SAKA NO TOCHU, emphasized the importance of partnerships in driving business growth and gaining confidence in their own capabilities. The experience of comparing their business with international counterparts highlighted the strengths and potential of Japanese impact startups.
Communities play a vital role in building resilience within the impact startup ecosystem. B Corp Certification has emerged as a driving force globally, promoting social and environmental responsibility among businesses. While Japan has a relatively small number of B Corp Certified companies, the enthusiasm for certification is growing. The benefits of certification extend beyond increased sales, fostering a tight-knit community that can support each other and navigate the challenges of creating positive social impact.
