[Discussion] J-Stories Editorial Committee Roundtable (Part 2): Turning Japan into an innovation hub

J-Stories, an international news service spotlighting innovative initiatives from Japan-based startups, achieved a breakthrough year in 2024. The platform expanded its reach beyond digital media by hosting pitch events, while also evolving from a bilingual (Japanese-English) service to a trilingual one with the addition of Chinese. At the same time, the world continues to wrestle with persistent challenges—wars, conflicts, natural disasters, climate change, and inflation. Yet, alongside these enduring struggles, new complications have emerged. The rapid rise of artificial intelligence, the erosion of traditional media’s influence amid the surge of social media, and ongoing logistical disruptions driven by labor shortages are reshaping the global landscape.

As Japan's first solutions-driven media outlet, J-Stories has been exploring the ways in which various problem-solvers are addressing these societal challenges. The platform is also reflecting on its role in covering these issues. In this roundtable discussion, members of J-Stories’ editorial committee — Executive Editor Toshi Maeda, Chief Editorial Adviser Katsuro Kitamatsu, and Editorial Adviser Sayuri Daimon — look back on the tumultuous year of 2024. They discuss the issues deserving of our attention in this era, potential solutions, and the role J-Stories should play in this ever-evolving landscape. (Part 2 of a two-part series. Interviewer: J-Stories Deputy Executive Editor Takanori Isshiki.)

You can find Part 1 here.

J-Stories: In the first part of our discussion, we talked about how 2024 was a tumultuous year and how Japan’s ongoing challenges — such as an aging population and declining birth rates — could serve as a catalyst for innovation, potentially positioning Japan ahead of the world in some ways. At J-Stories, we've always focused on broadcasting various forms of solutions emerging from Japan to the world. With that perspective in mind, I’m curious to know whether Japanese startups have been more successful in expanding overseas in 2024 compared to previous years. What’s your impression, Executive Editor Maeda?

Maeda: Last year, I encountered many companies with a strong desire and intention to go global, and I could feel their enthusiasm. However, unfortunately, there are still few success stories to speak of. One of the key reasons for this is that many of these startups are not fully prepared to communicate in English. For instance, their websites often don’t function well in English, and even when they do, the content is simply a direct translation from Japanese. It doesn’t come across as an effort to genuinely engage with an international audience. This issue persists in many cases. There are several underlying causes, but for companies that remain primarily embedded in a Japanese-speaking environment, it’s difficult for overseas investors and potential partners to grasp what the company does or who’s behind it. This makes it hard for these companies to position themselves as viable business or investment opportunities. Unfortunately, we hear these kinds of concerns frequently from international stakeholders. Even though Japanese companies may possess excellent technology, many — including not only startups but even publicly listed companies — still face significant communication barriers when trying to engage with the global market.

Kitamatsu: The issue of English proficiency remains a significant barrier. While Japan’s population is declining, it still boasts a massive domestic market of over 120 million people. For many companies, focusing solely on the domestic market has historically been sufficient for survival, and this mindset persists even among large corporations. There is still a lack of urgency when it comes to expanding abroad in order to achieve long-term success. As a result, English-language capabilities are often given a lower priority. I believe this is a widespread issue across many industries.

Daimon: With the advent of AI and other translation tools, some entrepreneurs may believe they can forgo learning English, but I disagree. As noted by a translator in J-Stories, relying solely on AI translation often fails to convey the intended message accurately. If you don't fully understand the content and its context before translating, the message will inevitably lose its nuance. This is particularly critical in business negotiations. It’s essential to convey not just the information, but also your thoughts and enthusiasm. For that, I believe strong language skills are necessary — skills that allow you to communicate the full depth of your message.

J-Stories: When Japanese startups aim to expand overseas, they not only face the language barrier you mentioned earlier but also must contend with the need to adapt to diverse international markets — understanding different consumer behaviors and adjusting products or services accordingly. Additionally, fostering relationships with overseas companies and investors is key. In that regard, have you observed any new developments?

Maeda: A significant trend in Japan in 2024 has been the rise of inbound startups. This doesn’t refer to tourists, but rather to foreign startups entering Japan in search of business opportunities. We’ve seen an increase in business matching with large Japanese corporations and investors, which has injected a sense of momentum into the market.

Daimon: The surge in inbound activity can be attributed not only to the needs of foreign companies but also to strong support from the Japanese government and local municipalities, which has played a crucial role.

Maeda: That’s right. A key factor is the extensive support provided by the Japanese government and local municipalities to foreign startups. For instance, Fukuoka City has been particularly proactive, offering visa assistance and office spaces for as little as 30,000 yen per month. In Tokyo, Shibuya Ward has provided free coworking spaces for overseas startup entrepreneurs. The aim is to transform Japan into a global innovation hub, connecting foreign entrepreneurs with domestic startups and venture capitalists, and ultimately fostering innovation that originates here.

In 2024, it seems that the business attraction strategies employed by local governments in Japan are gaining recognition overseas. International events showcasing Japanese startups to the global market, such as SusHi Tech, organized by the Tokyo Metropolitan Government, now in its third year, and RAMEN TECH, hosted by Fukuoka City, are becoming increasingly prominent. These events highlight Japan’s growing appeal as a hub for innovation.

As outlined in the Japanese government’s Startup Development Five-year Plan announced in 2022, the goal is to increase investment in startups by tenfold over the next five years. A key component of this strategy is attracting foreign investors and entrepreneurs to Japan.

If foreign startups are able to come to Japan and rapidly scale their businesses, it will likely spark even more interest from others eager to establish themselves here. Indeed, the number of foreign startups coming to Japan is on the rise. From my perspective, the globalization of Japan’s startup ecosystem, particularly in urban centers like Tokyo and Fukuoka, has made significant strides.

Kitamatsu: While I don’t have precise data on the extent to which Japanese startups are expanding overseas, I do believe, as you mentioned with the Startup Development Five-year Plan, that the environment for entrepreneurs to launch and grow startups has significantly improved compared to the past.

In the summer of 2024, it was reported that Andreessen Horowitz, a prominent U.S. venture capital firm with experience in investing in the metaverse, is opening its first Asian office in Japan. Historically, U.S. venture capital firms focused more on Chinese companies and showed less interest in Japan, but reports now indicate that Japan’s potential is being highly regarded. In addition, Techstars, one of the largest global investors supporting early-stage (pre-seed) startups, has been ramping up its activities in Japan, holding its first pitch event in the country last year.

Reflecting these trends, the Global Startup Ecosystem Report 2024 by a U.S. research organization ranked Tokyo 10th globally, climbing five spots from the previous year. Overall, I believe the startup environment in Japan is improving. However, in a separate country ranking, Japan’s position dropped three spots to 21st. In addition to the language barrier, factors such as a shortage of talented entrepreneurs and a risk-averse mindset are frequently cited as impediments.

Daimon: One notable issue is the stark contrast between rural and urban areas. In large cities, the startup ecosystem has been well established, and from the perspective of urban residents, Japan appears to be doing quite well. However, when you look at rural areas, the challenges are still more pronounced.

To nurture talented entrepreneurs and foster businesses that embrace risk, it is essential to recognize diverse ways of working and address issues such as language, aging, and gender. Yet, particularly in rural areas, there is still much work to be done in terms of responding to diversity.

J-Stories: Daimon, since you frequently visit rural areas for interviews and meetings, what specific challenges do you observe?

Daimon: Prime Minister Ishiba has expressed his vision of creating a society where young people who move to cities can return to rural areas to find jobs and start families, helping to promote "rural revitalization." However, I believe this will be difficult to achieve without addressing why young people, especially women, are reluctant to remain in rural areas. Why is it that everyone tends to migrate to cities?

In rural areas, women often face discriminatory treatment simply because of their gender, and are relegated to auxiliary roles traditionally dominated by men. In contrast, cities offer women the opportunity to be themselves. Even when we discuss "promoting women’s participation," it’s not just a matter of changing systems; societal mindsets must shift to facilitate real change. In rural areas, the male-dominated social structure remains deeply entrenched. For instance, neighborhood associations are typically composed of men, and if a woman attends in place of her husband, she might be questioned with, "Why are you here?" 

In male-dominated societies, women often face criticism or are viewed with suspicion when they attempt to take an active role. This isn’t an issue confined to rural areas; it’s also prevalent in urban environments. For example, in the venture capital sector, there are few female investors, and due to the lack of female entrepreneurs, accessing the information shared within the so-called boys' club is a challenge. These frustrations are common across various sectors. In this sense, I believe it’s crucial to change the mindset not only in rural areas but throughout Japan as a whole.

Maeda: I truly believe it is. While it may be challenging to shift the mindset of large corporations and government offices in rural areas, creating an environment where startup companies can thrive in these regions could not only address employment issues but also help change societal attitudes.

When considering Japan’s declining birth rate, aging population, and rural depopulation, there is often a prevailing sense of pessimism. However, when speaking with startup entrepreneurs from abroad, I frequently hear them say, "This is an opportunity." For instance, labor shortages in rural areas are a pressing issue, but foreign entrepreneurs view this as an opening to implement innovations such as AI. Given Japan’s labor shortages and aging demographic, it could become a leader in AI development, with rural areas potentially at the forefront of this transformation.

J-Stories: So, from an international perspective, Japan’s challenges — like the aging population and rural decline — are seen as attractive conditions for fostering innovation?

Maeda: Exactly. As I mentioned earlier, the influx of foreign startup representatives into Japan is partly due to the government’s initiatives. When these entrepreneurs are asked why Japan is attractive, it’s not only because of the favorable business environment but also because Japan’s challenges — such as the aging population and declining birth rate — are shared by other developed nations.

If Japan can develop innovations that address issues like the declining birth rate and aging population, these solutions will not only benefit the country but also provide a powerful branding opportunity for foreign startups. Successfully establishing a business in Japan — a market known for its high demands for product and service quality — becomes a significant asset for global marketing. A proven track record in Japan can enhance their business prospects not only domestically but also in regions like Southeast Asia.

While the rural-urban disparity is undeniably a serious issue, I don’t see it as something to be overly pessimistic about. On the contrary, the many challenges create significant opportunities for innovation and global-scale growth.

J-Stories: The idea that Japan holds immense potential has been a consistent theme since the inception of J-Stories. This is why we have focused on sharing Japan’s innovations in English with a global audience. As a media outlet, what more can we do to improve the situation?

Maeda: Up until now, J-Stories has been distributing content in both Japanese and English, aiming to share Japan's innovations with the world. In 2024, we expanded by adding Chinese to our platform, making it available in three languages. Although this feature is still in its beta phase and currently partly relies on machine translation, our goal for this year is to enhance the quality of our Chinese-language content.

The decision to add Chinese to our platform was driven not only by the desire to engage with mainland China, but also to connect with Chinese-speaking communities in Taiwan, Hong Kong, Southeast Asia, and the Chinese diaspora in Europe and the U.S., who may not necessarily be fluent in English. Since the beginning of 2024, we’ve seen a surge in inquiries from international readers. They’ve reached out asking, “I want to contact the companies featured in your articles” or “Could you introduce me to them?” We are thrilled with this response, which motivates us to further expand our reach and share information on a global scale.

Kitamatsu: I couldn’t agree more. A startup’s success is driven by several factors, such as cutting-edge technology, a promising market, and ample funding. But one critical element is the networks and connections between startups, as well as the links between startups and investors, such as venture capitalists. Being part of the startup community fosters collaboration, partnerships, and the exchange of ideas, which can act as a catalyst for business growth. While it’s essential for J-Stories to showcase individual solutions in our articles, we also want to focus on providing key information to help build such communities. For example, we plan to spotlight the personalities and human aspects of startup CEOs. Additionally, we aim to take an active role as a media outlet in organizing and promoting startup communities.

Daimon: As Kitamatsu highlighted, building communities goes beyond just exchanging information; it’s about creating opportunities for people from diverse countries to engage directly. This is incredibly important. A recent survey revealed a sharp rise in anti-Japanese sentiment among Chinese people, with negative perceptions climbing from 62.9% last year (2023) to 87.7% this year (2024). However, among those who had visited Japan or interacted directly with Japanese people, anti-Japanese sentiment was much lower. This underscores the significance of direct engagement and exchange. The first step in building mutual understanding is the sharing of accurate information. This is a responsibility J-Stories should take on, especially now that we’re distributing content in Chinese.

Maeda: In supporting Japan’s startup community, our goal extends beyond creating content. We also aim to connect Japanese startups with stakeholders overseas. In 2024, we took a step in this direction by co-hosting the Japan Global Innovators’ Forum with the Mainichi Mirai Creation Lab. This pitch event introduced Japanese startups, which have technologies and ideas capable of solving global social challenges, to investors and experts from around the world in English. The second edition of this event is scheduled for March 2025.

Given the recent influx of inbound companies, we plan to not only introduce Japanese companies with solutions to global problems, but also to match them with overseas startups that bring technologies and ideas to address Japan's challenges. This initiative will help link these startups with domestic venture capitalists and other stakeholders.

Daimon: The Japan Global Innovators’ Forum was an excellent event. I hope that through such events, which create spaces for startups to interact, both Japanese and international startups can forge connections and unlock new business opportunities. I believe this is one of J-Stories' key roles in supporting such initiatives.

Maeda: Looking ahead, we’re planning an even larger event in May 2025. We’ll bring together nearly 30 Asian unicorns — startups less than 10 years old with valuations exceeding $1 billion — and around 100 founders and executives, including CXOs from established venture companies, to Tokyo. This event will be co-hosted with Korea’s largest newspaper, The Chosun Ilbo, and will be positioned as a partner event for Tokyo’s SusHi Tech.

While we’ll share more details in due time, the event’s primary goals are to foster cross-border networking — connecting startups with international venture capitalists, stock exchanges, and like-minded stakeholders. At the same time, it will gather passionate Asian startup founders committed to improving the world. In an era where division often overshadows unity, we see this event as a powerful platform for startups to send a message of peace through international collaboration.

Translated by J-Stories (Anita De Michele, Lucas Maltzman)

Editing by Mark Goldsmith

Top photo by J-Stories (Giulia Righi)

For inquiries regarding this article, please contact jstories@pacificbridge.jp

Click here for the Japanese version of the article