In the fast-paced world of technological advancements, Japan is an innovation powerhouse. Start-ups are popping up every day to try their hand at succeeding in the Land of the Rising Sun. Yet, even with Japan’s openness to these start-ups, there are intricacies to the Japanese market that act as barriers.
What are start-up incubators?
In the heart of Japan’s relatively underdeveloped start-up ecosystem, a dynamic force has been quietly shaping the future of innovation and bypassing the barriers – Incubators in Japan. These nurturing hubs have become the driving force behind the country’s entrepreneurial churning, propelling startups to new heights and ushering in a wave of groundbreaking ideas.
Start-up incubators are early-stage start-up growth programs that provide free office space, mentoring, networking, and seminars on how to develop and test your new idea. They also offer specialized tools for a targeted industry of start-ups. We’ll be exploring all types of incubators today, going into the details of what each one represents as a company. If you are looking to understand the macro picture of the startup world in Japan, check out our podcast episode with Tim Romero, host of Disrupting Japan and well-known startup founder.
Have a quick look at what we’ll cover with this table below.
The state of Japan’s start-ups
If you’re considering establishing your business in Japan, it’s important to understand the start-up culture prevalent in the country. Japan’s start-up landscape benefits from vigorous governmental support, particularly in industries such as healthcare, finance and insurance, robotics, food, agriculture, and deep tech. The national government is also actively investing in biotech and financial technology, further fostering innovation.
Moreover, various other sectors are witnessing australia phone number library a surge in demand, including logistics, mobility, energy and materials, space materials, entertainment technology, and e-commerce. Within these industries, there is a noticeable appetite for solutions incorporating AI, Cloud technology, and AR/VR capabilities, emphasizing Japan’s enthusiasm for innovation. There are a number of tech startups today. To learn more about the Japanese tech scene, read our article on Japanese tech companies.
Several cities in Japan, notably Sapporo, Aichi, Kobe, Fukuoka, and Tokyo, are currently competing to attract start-ups to not only create high-paying job opportunities but also to propel the growth of their respective industries. Fukuoka City in Japan, for example, is hoping to attract Fintech and IT-related start-ups through its Fukuoka Global Start-up Center. Learn more about this exciting opportunity on our podcast episode with Akiko Nakagawa.
These vibrant cities are manifesting entrepreneurship and offer a promising environment for businesses seeking to establish themselves within Japan’s thriving start-up ecosystem. If you’d like to have a comprehensive guide on creating your own start-up in Japan, have our guide on hand while you navigate through it.
Start-up incubators vs. accelerators
Many may be confused about the types of start-up support. They range from angel investors to accelerators, to incubators. Our podcast with Alexandria Cole, a venture capitalist at Incubate Fund, has a more in-depth explanation of each. Start-up incubators most closely resemble startup accelerators, Here are a few key differences.
| Incubators in Japan | Accelerators | |
| Investment | Free office space to give your business a landing point aside, free specialized facilities, and guidance | Seed funding |
| Venture Stage | Idea Phase, without a product or team | Minimum Viable Product phase |
| Program Time-frame | Flexible time-frame | 3-6 months |
Foreign Startups
Foreign start-ups looking to enter the Japanese market probably don’t know the ins and outs of the Japanese market. Here’s a breakdown of the things you should consider when deciding whether to utilize incubators in Japan when you first start out.
Support for navigating regulations
For foreign business owners looking to establish to understand more about a startup in Japan, navigating the country’s unique regulations and administrative processes can be challenging. Language barriers, legal complexities, and cultural differences all pose significant obstacles for the typical foreign business. But, this is where incubators in Japan can be instrumental in providing start-up support.
These programs are well-versed in the local business landscape and have experience assisting foreign entrepreneurs in starting their business ventures in Japan and can help you navigate the paperwork side so you have more time to actually focus on developing a product that people want.
Incubators in Japan typically offer guidance on various regulatory aspects, such as business registration, licensing, visa applications, bank account creation, and tax requirements. Their expertise can help streamline the bureaucratic processes, ensuring that foreign startups can focus on developing their business without getting entangled in red tape–foreigners who don’t speak Japanese are often not serviced in these establishments because of translation issues. By leveraging the knowledge and network of incubators in Japan, foreign entrepreneurs gain a competitive edge and avoid potential pitfalls.
Costs associated with entering an incubator:
Foreign startups often face financial challenges b2c phone list when establishing themselves. Establishing a business in a foreign country can incur significant expenses, including market research, office space, hiring local talent, and marketing efforts. This depends on the stage and other factors which you can learn more about in our podcast episode with Haruka Takamori, a venture analyst at Plug and Play Japan. However, partnering with incubators in Japan can offer a cost-effective solution.
While there might be some costs associated with joining an incubator program, they are usually considerably lower than setting up an independent operation. Incubators in Japan typically provide shared office spaces, access to essential resources and facilities, mentoring, and networking opportunities.