Japan – a Paradise for Entrepreneurs

Back to News

I have worked across Asia and the experience has been fantastic. On the business front, it has provided markets many times the size of my native Australia. In addition, these markets come with a population density that offers great opportunities around economies of scale and low distribution costs.

Beyond the generic, having had operations in China, Japan, India, Malaysia, Singapore, Hong Kong & Taiwan has allowed for some fairly pragmatic comparisons of commercial codes, employment practices and access to funding. Even better has been the opportunity to see the “softer” areas of business such as the work-ethic of the labour force, the amount of red tape encountered when doing business and to get a feeling for how level is the playing field in a society where you operate as a outsider.

On all the countries I have seen, no one stands definitively head and shoulders above the rest. However a combinations of factors makes Japan, for my money, a better place to be an entrepreneur than anywhere else in Asia – and this includes the rapidly expanding Chinas. So why do I see Japan a paradise for entrepreneurs?

There are few entrepreneurs here

The Global Entrepreneurship Monitor is a country-to-country comparison of entrepreneurship. In Japan, adults involved in early-stage companies (startup to owner operated 3.5 year businesses) comprise just 3.5% the workforce which ranks Japan the lowest of the 54 countries in the survey (in comparison, the rate in America is about two and half times higher). This dearth of entrepreneurs will not last forever for changing social attitudes toward Japan’s lifetime employment and labour mobility will encourage seniors and women with personal savings to invest in creative business ideas. Even so, for today’s entrepreneurs there is a decade before the percentage of entrepreneurs in the market reaches the level of other countries.

The place is wired!

Japan’s population density supports some great IT infrastructure (even my home in rural rice farming village has super high speed fibre optic cable). And this infrastructure is widely used for Japan has 94,000,000 internet users (about 75% of the population) which overshadows China which has about 27% internet penetration. Not only is the reach there but it also gets a lot of use with Japanese sending 4 times as many messaged per capita as Americans. Things do not get much better than this for businesses that want an efficient online environment capable of reaching a broad market and all demographics.

Customers, customers everywhere

If online is not for you and you want physical customer relationships, then look no further than some of Japan’s major cities. The population of greater Tokyo for example is around 12 million swelling to over 16 million on a working day. Compare this to Australia’s 21 million spread out across a continent and add in the fantastic public transport system and it is easy to see that if you need physical access to customers, moving even 10km around my office in Tokyo will provide me with more and highly logistically efficient customer opportunities than I could reach in Australia in my working lifetime.

China is growing but…

At purchasing power parity per capita income in Japan stands not far behind Australia at around US$34,000. Compare this with China where PPP per capita income is US$6,500. If you want to live in rural China, US$6,500 may be fine but if you are looking to use your earnings overseas, then there is little point in having customers who cannot afford to pay an amount that generates meaningful spending power for you.

A workforce who cares

“Kaizen” or the drive for constant improvement is permeates the Japanese workforce. This means that your employees are constantly looking for how to better serve YOUR customers and how to more efficiently operate YOUR business. In Japan I take this degree of engagement as normal and thus I am amazed

when I am overseas that service standards continue to centre on what employees want to provide rather than being customer centric. In terms of having and engaged workforce, Japan stands head and shoulders above anywhere else I have worked. As an entrepreneur, what more could you want for your businesses.

Don’t get me wrong; I am not saying that Japan is an easy place to do business. Japan is after all renown for its complexities and unique cultural and social norms. Rather, if you can get on top of these unique aspects of doing business and building relationships, Japan has the all the elements that an entrepreneur needs to thrive.