Major weather alerts and international tensions aside, 2018 is looking pretty bright for entrepreneurs inhabiting Asian grounds. Last December, Japan reported improved conditions for the fifth quarter in a row, with momentum expanding all throughout the spring and summer of this year. The focus on AI and Bitcoin grows even wider, as Asian consumerism steadily drifts towards a new economic chapter.
It’s a whole world of possibilities that are once again wide open to Japanese businesses.
These are its building blocks, all set to erect the nation to the new heights.
1. Mid-Sized Tech Firms to Outplay Both Keiretsu and Startups
Keiretsu, a unique corporate structure that ruled the Japanese economy for decades after the war, has long run out of ideas. In between the 1990s and today, the majority of world-renowned brands and flagship companies from Asia were compelled to announce bankruptcy and pass the torch to startups.
For years, startups have remained the main driving force of Japanese economy. Companies like SmartHR, Xica, Linough and Connected Robotics continue to dominate native and global niches, and will certainly be present for years to come. As a legacy, they left Japan a fresh and innovative mindset.
At the same time, this innovative mindset was finally equipped with better tools – the technology locked up in Japan is nothing less powerful than business solutions used by startup leaders in Silicon Valley. The only difference is, its true application in Asia is not in startups, but in mid-size businesses.
Such are the 139 manufacturing firms from Japan that Apple has chosen for creating their top-notch products, for instance. Currently, there’s more than 165,000 successful SMEs in Japan, led by revolutionary firms like Hosoo and Seven Dreamers that have already penetrated the global market.
For the entire Japanese economy to turn around, only 1% of these mid-sized companies would need to succeed. If only 1% of them chooses to make a shift from manufacturing to ideation, and manages to survive, Japan will need no more than 10 years to regain its former glory and start leading the ranks.
The focus on AI and Bitcoin grows even wider, as Asian consumerism steadily drifts towards a new economic chapter.
2. Asian Businesses Nurturing Artificial Intelligence in Japan
According to Japanese government data, the private sector in Japan invests approximately ¥600 billion in Artificial Intelligence every year. AI is nothing new – the rest of the world has been using it for a couple of years now. What’s new for Japan is that this nation is becoming a leading AI developer too.
Both Deepcore and SBI Holdings have recently made names for themselves by establishing funds for AI investments and raising billions of yen for Japanese startups that are looking to tackle new AI and blockchain grounds. One of the first startups to be launched under Deepcore’s wing was – VAAK Inc.
3. The Unstoppable Rise of a Brave New Bitcoin Nation
After China and Korea had shut down all cryptocurrency exchanges in early 2017, Japan’s long-lasting obsession with digital coins exploded in a massive growth of crypto trading. Since then, virtual currencies have remained a legal form of payment in Japan, and an elegant new way of doing business.
And it’s not only Bitcoin that makes the economy go around here. Long before 2017, Japan has established a significant number of Bitcoin exchange systems, the most successful of which were Bitflyer and Singapore-based QUOINE, but has also started a home-grown currency called Monacoin.
Today, the Japanese economy is heavily relying on cryptocurrency to rebuild Tokyo into a world-recognized financial hub it once was. The Financial Instruments Exchange Act is still working hard with the blockchain industry to design the best possible regulatory framework and ensure healthy growth.
4. Cloud Cities Shall Erect from Connected Platforms
The blockchain industry isn’t the only one that the Japanese government has approached in order to leverage cutting-edge technology and solve civic problems. Firms like WeChat, Gojek and Grab are working hand in hand with the officials on collecting data and connecting users with service providers.
While multipurpose platforms continue to harness user data and store it on the cloud, the Japanese government is partnering up with their parent companies to achieve the same level of comprehensive service on the ground level too. The result? Thus far, smarter traffic. In the near future, smart cities.
5. Staying on Track for a Record-Setting Growth Streak
This year, the confidence index among Japanese SMEs reached 15+, which is the highest level recorded since August 1991. The economy rating itself has continued to rise for 13 months straight, prompting the government to finally publish their indexes of Business Conditions with former pride, and declare that the conditions in Japan are at last “improving” without any indicators of it slowing down in 2018.
Looking at the bigger picture, Japan can now proudly say that this slow but steady improvement hasn’t stopped since December 2012. In conclusion with September 2017, this 58-month long upsurge counts as the second-longest expansion since the end of WWII, including the illustrious Izanagi boom.
Positive change is already apparent in both export and import, equally thanks to the Japanese suite of ideas and technology and to the favourable global conditions. Tourism is flourishing as well (along with consumption associated with the arrival of new tourists), and is expected to progress even faster.
The Japanese job market is steadily strengthening too, while higher employment and better wages offer a host of new benefits for Japanese employers and employees alike. It’s no wonder then that the general standard of living and citizen satisfaction have went up as well – according to the Cabinet Office’s 2017 Public Opinion Survey on the Life of the People, a whopping 73,9% is now living better.
Seems important to note, this is the highest percentage recorded in the last 50 years.
Perhaps Japan’s unstoppable rise to the global top could be linked back to this year’s early and extended cherry-blossom season. Maybe it’s due to a new business-savvy mindset, finally ready, willing and able to disrupt leading tech-related industries. Whatever the case, Japan is looking strong.
Let’s see how the business environment in Japan is changing and which changes we can expect to see in the future.
