Narrator: Investing in Japan Expert Perspectives
Foreign investment in Japan has continued to increase, and as of the end of 2022, totaled 46.2 trillion yen. In this interview series, we unravel the reasons behind Japan's current allure as an investment destination, exploring the insights of experts from around the world.
Interviewer: So, we're joined by Dr. Tony, a successful entrepreneur and an international leader, and commercializing university research, investment funds and the startup ecosystem. Great to have you, Dr. Raven.
Tony: My pleasure to be here.
Interviewer: Thank you. So, first of all, could you tell us about your connections or involvement with Japan?
Tony: Yes, my first connection with Japan started many, many years ago when actually just after I was a student and I was offered the opportunity under the Japan Society for the Promotion of Science Initiative to come and research at Osaka University, which I did for a year and a half. And this was in 1980, 1981. A very different world to Japan today, but a really sort of life shaping experience.
Interviewer: And you have been a very successful serial entrepreneur over the years. And from your perspective, compared to other parts of the world, what are the characteristics of Japan startup market as an investment and expansion destination?
Tony: Particularly in the last ten years, a significant move in the direction of supporting and encouraging and wanting to be better in the startup field. And that's everything from the investment to all the support infrastructures which are there to help them. So, I think that has been a massive change.
Tony: I'm an advisor at the University of Tokyo for the investment and incubation company, the students there have these aspirations to be entrepreneurs to create their own companies. The other thing which has changed a lot is the accessibility and openness of the society and that historical sort of challenging reputation.
Interviewer: What do you think startups can take away from those Japanese companies working with them?
Tony: I think the one major one is Japan is really world renowned for the way it does production processes. So, we're all used to many of the companies having adopted processes, which were first started in Japan. And I think that is very useful when learning about how to make a product which is really high quality because the Japanese market is very demanding on quality; how to make a very high-quality product consistently all the time.
And remember, the Japanese companies are very well networked, so it's not just the company you're dealing with. So, I think there is a side of how you cooperate, bring in all the resources from different areas, different companies that one can build on as well. And I think the Japanese are very good at that sort of networking and collaboration within the industry.
Interviewer: I see, okay. And could you give us some examples of foreign startups that succeeded in this changed Japanese market?
Tony: Well, I think there're two types. There's not just foreign ones, but also the domestic market itself is growing and as you know, the current government's startup five-year plan has great ambitions both in number of companies and the support that's available to the investment that is there going I think up is it from 10 billion dollars to 100 billion dollars available for investment in supporting these companies. So, some really exciting deep tech companies that are coming out of the Universities.
But on the other side, sort of at Cambridge, we had two companies which have been acquired by Japanese companies. So, Cambridge Display Technology, which was the OLED chemical displays for TVs and other displays which was bought by Sumitomo, now part of Sumitomo, and now part of a lot of the displays which are out there. And then much more recently Astex Therapeutics, which was bought by Astellas and is now part of that company and Astellas - Astex at the time Astellas bought it was actually quite a cutting-edge company, quite a sort of, if you could say in pharmaceuticals, a high risk because it was taking some very exciting new approaches to doing things and Astellas was right behind it.
Interviewer: I see. So, there are like a lot of startups nurturing in Japan, and there's also an investor sector that can put money into those startups. Great.
Tony: And there's the facilities. So, I mean Mitsui Fudosan is building the big Nihonbashi biotech quarter right in the middle of Tokyo and all about biotech companies and startups. So, there's not just the money and the support, it's also all the infrastructure you need and then the network. So, it's all coming together I think, very positively. And you'd be foolish these days not to consider Japan very seriously in your international thinking. I think it's got a lot of positive attributes and things. So people I think, sort of underestimate just the strength and size and weight of Japan as a country in the international economy.
Interviewer: Right. Okay. And as you mentioned, you're an advisor to an Innovation Platform at the University of Tokyo, University of Tokyo, IPC. Now, in the global context, and how do you evaluate Japanese university research and the potential that it holds?
Tony: Well, I think Japanese universities are among the top universities in the world, the leading Japanese universities. They've made a tremendous contribution in the past, but I think also there's a sense within the universities that there's a lot more they could be doing and there's a lot more opportunity for them to work internationally, as many other universities do around the world with partners to either evolve the technology, products and services, companies are all currently involved in or to start completely new companies. I think if you look at the strong technology ecosystems around the world, they're all built around the universities. And if you look at the statistics, I mean half of the venture capital dollars invested into life science companies in the United States go into universities spin outs. That shows just how powerful a generator they are.
And I think this has been spotted by the universities and by the governments in Japan that although they've been doing well, there's a lot more that can be done. There's a lot more opportunity going on then. And the research really is world class. You just got to get over this barrier of the historical misperception that it's a difficult country to deal with. It is delightfully easy to deal with as any other international country. And that's especially if you're a big company, that's not a barrier because you think globally, but particularly a startup and you're thinking, where do I go in the world? Really do start with Japan on your top list of things and places to think about going.
Interviewer: Right. So, from all those years with a connection and your involvement with Japan, do you think this is the time for startups and other companies to come to Japan as their destination?
Tony: I think it's been that time for a little while now, but I think now is perhaps the time for “So, what are you going to do about it?” Time to actually think about doing something rather than just thinking about it. Because I think the opportunity has been there for a while. It’s there and the support and openness. And if you just talk to University, Tokyo, IPC who are working internationally as well, the universities could be great segues into the opportunities and how to get involved. And also talk to your embassy.
Interviewer: I see, okay, thank you very much for your, you know, your insights and advice I think is very interesting. Thank you so much.
Tony: It's been my pleasure.
Narrator: In Japan, infrastructure, funding, and support for startups are in place, and the environment is becoming more favorable for investing in them. The university-based innovation ecosystem also fosters excellent startups, creating an attractive market for overseas tech management and investors.
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Investing in Japan Expert Perspectives
