The Emergence of Startup Ecosystems in Japan

Ying Cheng (), Adam Cross (), Martin Hemmert (), Agata Kapturkiewicz (), Masahiro Kotosaka () and Franz Waldenberger ()
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Ying Cheng: Chongqing University, School of Economics and Business Administration
Adam Cross: Xi’an Jiaotong-Liverpool University
Martin Hemmert: Korea University, School of Business
Agata Kapturkiewicz: Sophia University
Masahiro Kotosaka: Keio University, Faculty of Policy Management
Franz Waldenberger: German Institute for Japanese Studies

Chapter 4 in Unleashing Innovation the East Asian Way, 2026, pp 43-66 from Springer

Abstract: Abstract This chapter explores the evolution of startup ecosystems in Japan, tracing their historical development, structural challenges, and recent shifts. Post-war pioneers, such as Sony, Honda, and Kyocera, capitalised on government-backed industrial policies and technological innovation to spur growth, while consumer-driven businesses expanded the entrepreneurial landscape amid rapid urbanisation and changing consumption patterns. Japan’s corporate structures—such as the main bank system and lifetime employment—ensured stability but constrained the entry of startups. Nevertheless, innovative firms such as SoftBank, Nidec, and Nintendo succeeded by navigating rigid business norms, and exploiting niche markets and disruptive technologies. The late 1990s and early 2000s brought pivotal reforms—financial deregulation, venture capital expansion, and university-industry collaboration—that stimulated entrepreneurial activity. Tokyo now dominates as Japan’s startup hub, attracting the majority of investment and talent, while secondary ecosystems in Fukuoka and Osaka are gaining momentum through targeted policy support. The chapter also examines the international expansion struggles of Japanese startups and the rise of young ‘deep-tech’ and ‘cross-tech’ firms that are addressing them.

Keywords: Startup ecosystems; Port-war innovation; Japanese management system; Tokyo hub; Internationalisation challenges; Policy reforms (search for similar items in EconPapers)
Date: 2026
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DOI: 10.1007/978-981-95-6513-9_4

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