A Study on Government Policies and Large Firms’ Strategies in the Japanese Startup Ecosystem: Focusing on the Period of Abenomics Growth Strategy

Abstract

Purpose: The purposes of this research are to review the startup support policy of the Japanese government and the startup utilization strategy of Japanese large firms during the period of Abenomics Growth Strategy and to search for some implications for Korean government and firms. Research design, data, and methodology: An analytical framework for a startup ecosystem was developed for this study, and this study focused on government policies and the role of large firms in the Japanese startup ecosystem. As to the government policies, it reviewed the economic background for the emergence of Abenomics and the evolution process of startup support policies from 2013 to 2021. It also dealt with a road map of Japanese government’s policies related to startup support and a recent policy to promote the establishment of regional startup ecosystems around Japanese major cities. At to the startup utilization strategy of Japanese large firms, it discussed the managerial background for the necessity of open innovation in Japanese large firms and introduced several cases of strategic alliance between Japanese large firms and startups. In addition, the performance of the Japanese startup ecosystem under Abenomics was discussed in terms of university-based startups, venture capital investment, and IPOs. Results: It was found that the startup support policies of the Japanese government evolved from facilitating the creation of individual startups to creating effective startup ecosystems particularly emphasizing the linkage between large firms and startups. It was also found that Japanese large firms began to realize the limitation of doing all the things inside their own firm and to implement open innovation with domestic and overseas startups. In addition, it was found that Abenomics Growth Strategy had somewhat contributed to the improvement of the Japanese startup ecosystem although more time and endeavors are required to see the satisfactory results of the policy. Implications: This study tried to draw some implications for the Korean government and firms through reviewing Japanese experiences. Several implications were suggested for the Korean government: establishing a government control tower dealing with the whole national policies related to startup support, empowering university-based startups, building cluster-type startup ecosystems around Korean major cities, and enhancing the win-win collaboration between large firms and startups. As to an implication toward Korean firms, a more active utilization of open innovation with startups particularly in the area of modular architecture products was suggested.