Key Highlights:
- The Japanese government has chosen to increase its efforts to encourage start-ups and entrepreneurs, particularly in the rapidly developing sector of digital technology.
- According to government sources, the new measures will include the implementation of an Entrepreneur-in-Residence (EIR) program.
- Next year, the government will launch a pilot initiative that will help 30 to 50 entrepreneur prospects.
Fostering startups
The Japanese government has chosen to increase its efforts to encourage start-ups and entrepreneurs, particularly in the rapidly developing sector of digital technology.
Beginning next year, the government will pay subsidies to major enterprises that hire entrepreneur hopefuls, as well as start-ups that take staff on loan from large companies.
The number of start-ups in the United States, China, and several European nations has significantly expanded, and new enterprises have fuelled economic development in those countries. Japan has lagged behind other countries in terms of the number of start-ups, prompting the government to conclude that new assistance measures were required.
In its supplementary budget request for the current fiscal year, which ends in March, the Economy, Trade, and Industry Ministry would allocate $860 million. Prime Minister Fumio Kishida has made start-up support one of the foundations of the government’s growth plan.
New Measures
According to government sources, the new measures will include the implementation of an Entrepreneur-in-Residence (EIR) program in which young people planning to start their own businesses work at large corporations for experience and future funding, as well as measures to assist start-ups in securing personnel.
The EIR program, which is commonly used in the United States, is a system that permits entrepreneur hopefuls to work at organizations in industries that are similar to the target sectors of their own company ideas. Entrepreneur applicants can learn how to set up sales channels and mass manufacturing processes, among other things. It is also expected that the applicants would receive money from those corporations when they start their own enterprises.
Next year, the government will launch a pilot initiative that will help 30 to 50 entrepreneur prospects. Companies that recruit them will receive financial assistance to cover essential expenditures.
Because many start-ups struggle to locate enough employees, the government will cover around two-thirds of the pay and other costs that start-ups would have to bear if they accepted staff on loan from major corporations. On the one hand, it will benefit the large corporations since its younger employees who will be in key positions in the future will be able to get valuable work experience at start-ups.
According to a U.S. research firm, the number of unlisted start-ups with a corporate worth of more than $1 billion, or around 115 billion nicknamed unicorns as of September was six in Japan, 424 in the United States, and 165 in China.
