| | Aug - Sept 2023 9Although Japan used to be known for producing many startups that have grown to global enterprises like Sony, Honda, Nidec, and Kyocera, prolonged economic stagnation in the last couple of decades has been the primary cause and effect of lukewarm entrepreneurship in the countryGrowth Investments (VGI) , have amounted to about \433 billion ($3.2 billion ). JIC not only provides risk capital to these venture capital funds but also tries to nurture emerging venture capital operators by giving them advice in forming their first fund in hoping that they will become top-notch Japanese venture capital firms in the future. JIC will further reinforce its investment strategies in response to the government's plan. One of the strategies is "Go Global", where JIC will make commitments to international venture capital funds that have the ambition to work with Japanese startups and help them to do international business.In 2022, the size of the startup funding market was 877 billion ($6.4 billion) in Japan. Compared with Japan's GDP, which is the third largest in the world, the market was only 0.13 percent of the GDP. In peer countries like U.S. and U.K., the ratios were much larger (U.S.=1.02 percent, U.K.= 0.99 percent), indicating that the Japanese ecosystem is in still nascent status. However, the status has worked in favor of Japan. While U.S. and European markets recorded a huge decline in startup funding in 2022, the Japanese market performed relatively well with a year-over-year growth rate of plus 3 percent (preliminary). This is partially explained by the fact that, even back in the boom period in 2021, growth stage funding was still under-developed in Japan, and, therefore, market correction in the stage during the year gave a relatively small impact and, on the other hand, growing early-stage funding led the total funding volume to increase. This would bode well for Japan. The Japanese government aims high. The five year plan targets to create a 10 trillion ($76 billion) startup funding market in five years and to produce 100 more Japanese unicorns by then. Japan Business Federation or Keidanren, an industrial organization representing leading Japanese companies, is also promoting the growth of startups and working with the government to make it happen. In five years, people will learn whether the public and private initiatives eventually paid off. The author believes the enthusiasm observed at City-Tech. Tokyo 2023 is a harbinger of good fortune.
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