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3 Key Trends Shaping Japan's Startup Future: Insights from SusHi Tech Tokyo 2024
On May 15-16, the "SusHi Tech Tokyo 2024" event took place in Tokyo, Japan.
As an entrepreneurship education startup, underdogs participated to promote Korea's education content and services to the global market. In this article, we share our insights into Japan's startup ecosystem gathered from the event.
SusHi Tech 2024 is Japan's largest startup conference, hosted by the Tokyo Metropolitan Government. This year, the event saw participation from 429 companies across 48 countries, adding to its vibrancy. The name “SusHi” is an abbreviation for “Sustainable High City Tokyo".
underdogs participated in the global startup program at the event. As a Korean edutech startup, we set up a booth to introduce our entrepreneurship education content and services. Our booth attracted visitors not only from Japan but also from China, the USA, Singapore, and various European countries.
The Dawn of Government-Led Startup Support Ecosystem
Before visiting SusHi Tech Tokyo 2024, underdogs had a specific goal: to actively promote our entrepreneurship education services in Japan, under the hypothesis that a government-led startup support ecosystem was just beginning to spread in Japan. SusHi Tech 2024 was the perfect starting point for this endeavor.
Traditionally led by venture capital and accelerators, Japan's startup ecosystem is now leveraging government support. Since Prime Minister Kishida announced the "Five-Year Startup Development Plan" in 2022, the atmosphere in Japan has gradually changed. The plan aims to foster 100,000 startups and increase startup investment to 10 trillion yen by 2027, marking the dawn of a new market.
This shift is reminiscent of South Korea's startup ecosystem ten years ago.
Back then, I also sought information about entrepreneurship as a ready-to-go founder, and government-supported programs began to emerge, encouraging more people to start their ventures. As the ecosystem expanded from investment-focused support to economic revitalization, new markets and businesses in entrepreneurship education and investment arose.
underdogs, founded in 2015, thrived as an education company nurturing entrepreneurs during this boom. At SusHi Tech 2024, we felt a similar sense of déjà vu. We realized that Japan's startup ecosystem is at the beginning of its expansion, and we foresee more opportunities for Korean startups.
(Refer to: Here's how a South Korean startup made $38 million from entrepreneurial education business)
Preparing for a 'Cambrian Explosion' in the Japanese Startup Ecosystem
With increasing government support, interest and activities around startups are rising across Japan. Various Japanese business schools participated in SusHi Tech 2024, responding quickly to this trend. Corporate social responsibility departments of local companies also attended the conference, exchanging ideas on open innovation and entrepreneurship education for ESG* (Environmental, Social, Governance).
The beginning of ecosystem activation means the ecosystem is still in a transitional phase, creating opportunities for players who can provide necessary conditions for growth in advance. Particularly, we noticed local governments and universities in Japan seeking solutions to awaken entrepreneurial DNA in the younger generation. This timing is crucial for companies capable of supplying what the market demands.
University representatives at the event unanimously stressed the need for a foundation to nurture entrepreneurs. While the government allocates budgets for startup support, there is still a lack of professional education on entrepreneurship on the ground. Japanese youth, unfamiliar with entrepreneurship, require education and awareness, indicating a transitional phase where demand exceeds supply.
Japanese students we met at the event expressed similar sentiments, showing interest in entrepreneurship but unsure of how to start a business, often finding it daunting. Reflecting this trend, youth entrepreneurship in Japan typically involves technology startups by individuals in their mid-30s with work experience. There's a need for diversity in entrepreneurship to revitalize Japan's startup ecosystem, with a relatively high interest in entrepreneurship education.
Japan Embracing Global Market, What About Korea's Startup Ecosystem?
One notable aspect of SusHi Tech Tokyo 2024 was the universal use of English.
It's generally believed that mastering Japanese is essential for doing business in Japan. However, at the event, startup representatives from Japan, Korea, China, Singapore, the USA, and other countries conducted business meetings in English.
Both foreign companies already established in Japan and those considering entering the Japanese market participated, actively networking. Germany and Austria stood out among European countries, while government-supported local teams from Singapore and Thailand also set up booths to shine their ventures.
Among Asian countries, Korea's presence was prominent, with numerous local governments and companies participating. It was clear that Korean companies are knocking on the doors of the Japanese and global markets through Japan's largest startup conference. Various Japanese firms, including lawyers, accountants, patent attorneys, and event agencies, visited Korean booths, requesting meetings to assist their entry into the Japanese market.
From the overall feedback from Korean startups, we gleaned two key points:
1. Caution in Entering the Japanese Market: Given that Japan is just beginning to open up and create support programs for foreign startups, it's advisable to approach the market cautiously.
2. Emerging Support Programs: Compared to the past, there are more diverse startup support programs emerging in both Korea and Japan, providing opportunities for startups to participate.
Japan's comprehensive changes to embrace global startups as a means of economic revitalization suggest significant implications for Korea's startup ecosystem. underdogs aims to quickly prove our value in Japan with our entrepreneurship education content, services, and as a SaaS company. The future of Japan's startup ecosystem and its globalization is something to watch closely.
Written by Dae-eun Park, Jae-seong Lim (underdogs)
Edit by Jinny Kim
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