ACS News Service Weekly PressPac: August 17, 2022

Japan’s start-ups gain attention from government and business groups

“In Japan, start-up culture is starting to emerge”
Chemical & Engineering News

For years, start-up activity in Japan has lagged; the country has not had as many successful young companies with dramatic growth compared to the U.S. But things are “starting” to change. Chemical, material and pharmaceutical start-ups are popping up across the country, spurred by more available seed capital and government incentives, according to a story in Chemical & Engineering News, an independent news outlet of the American Chemical Society.

Government and business leaders are concerned that Japan is losing its ability to be economically competitive on a global scale, says freelance writer Katsumori Matsuoka. The country’s largest companies are established giants, such as Mitsubishi and Toyota, in stark contrast to the many top young companies abroad. On the bright side, although Japan’s start-ups only raised $6 billion last year — compared to $311 billion for similar U.S. companies — that was an increase of 60% compared to 2018. And Japan’s Ministry of Economy, Trade and Industry is taking action to promote the growth of newly established businesses; in June, they issued a booklet of measures, which includes a loan program and tax incentives, to encourage start-ups.

Despite promising changes and growth, many investors still consider start-ups to be too risky to put cash into. Venture capital firms and banks continue to invest conservatively, so some young companies turn to crowdsourcing or to industrial companies that are more likely to understand the science to raise money. While the availability of venture capital for start-ups in Japan is increasing, many business experts say it will still take time to develop momentum on the scale of its U.S. counterpart.

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