Turning Tokyo into a Tech Hub: Inspiring Entrepreneurs

Major cities around the world dream about having their own version of Silicon Valley, but it’s not easy to try to emulate the magic mix available in northern California. Attendees at the New Economy Summit (NEST) 2016 heard from a number of entrepreneurs and experts on what Tokyo and other economies can do to foster communities producing successful startups. Silicon Valley, however, isn’t the only community that others can learn from.

“Despite our small size, we have managed to change the world by creating Skype, developed and co-founded by Estonians,” Estonian Prime Minister Taavi Rõivas said during a keynote speech at the summit. “We now have Europe’s biggest number of startups per capita.”

You may not know it, but the tiny Baltic country punches far above its weight in tech circles. It has attracted widespread attention in recent years as a model of entrepreneurship and digital government services known as e-Estonia. Estonians carry mandatory “e-ID” cards with chips that make it possible to sign legal documents electronically. They can also vote online and access thousands of other services through a government website. Setting up companies can be done online in as little as 20 minutes, while filing one’s taxes takes even less time because payments are digitally recorded, the prime minister said, adding that his country has a vision of “zero bureaucracy government.”

“Digital services are much easier to scale than traditional industries and it doesn’t matter to most of them whether you have 1.3 million citizens or 130 million like Japan has,” Rõivas said during a question period at NEST.

In another session entitled “Tokyo as a new Silicon Valley,” Japanese entrepreneurs reflected on their experience, events such as the 2006 Livedoor scandal, which dampened enthusiasm for startups, and what Tokyo should do to foster innovation. Business culture, social attitudes and structural problems dominated the discussion.

“Even though we can get funding fairly easily now compared to the past, people are still scared of being embarrassed,” said Susumu Fujita, president of video game publisher CyberAgent and an executive at the Japan Association of New Economy (JANE), which sponsored NEST 2016. “Those who work in conservative companies may want to see risk-takers fail.”

Yoshikazu Tanaka, founder and CEO of well-known social gaming company Gree, discussed his experience in Silicon Valley and noted how its atmosphere greatly differs from that of Tokyo.

“In San Francisco, I was like a rock star for being an entrepreneur, receiving praise from people I didn’t know, but in Tokyo people didn’t really want to talk about my business,” Tanaka said. “We need to be more lenient toward people who make mistakes and people who are crazy.”

“In Japan, there’s a lack of respect for entrepreneurs – my relatives still ask me when I’m going to join a company,” laughed Sorato Ijichi, founder and CEO of startup platform Creww and an executive member of JANE. Ijichi and fellow panelists including Yasukane Matsumoto, founder and CEO of printing platform Raksul, agreed that social attitudes toward entrepreneurship are slowly changing but Tokyo needs structural change to become a better tech hub.

“Deregulation is very important for innovation,” said Tanaka. “AirBnB and Uber have become popular in the U.S. but they face legal restrictions in Japan. To foster another Silicon Valley in Tokyo, we need a legal system that’s conducive to early-stage business ideas.”

Ijichi said successful entrepreneurs are vital for encouraging up-and-coming businesspeople. In concluding remarks, he added: “More major corporations should partner with startups in Tokyo for collaborations or investments so they can learn from each other, perhaps in a kind of test platform.”