The final frontier isn’t space. For venture capitalist investors, it may be Japan. Because Japan’s financial tech ecosystem is still in its infancy compared to the United States’, some VCs consider investments risky. However, with Japan’s advancements of AI (artificial intelligence) technology, the robot may be courting venture investors.
Koichi Hori, head of Boston Consulting Group Inc. thinks that Japan’s strength in engineering is changing its chances of getting investments.
“Digital media will only be in the mainstream for about three years, or five years at most,” Hori, said. “From that time on, robots and robotics will be the eye-catchy industries. Japan has a good chance, particularly in the area of hardware for robots.”
Japanese Prime Minister Shinzo Abe hopes to woo investments, creating a sort of ‘Silicon Valley annex’ in Japan. One of the defining differences Abe noticed was the reluctance of Japanese patrons to bet on up-and-coming startups, which affects the prospects of any real tech innovation.
Hori adds, “In the U.S., people who start their ventures are to a certain extent respected by society, and in contrast in Japan entrepreneurs have been considered as those who couldn’t become bureaucrats or employees of big corporations.”
Abe’s recent trip to California provided him more motivation to replicate the tech culture of Silicon Valley, with the the robotics industry to start. To do so, the prime minister will delegate plans to insert $19 million into robotics by 2020.
Things are starting to shift in Japan, though slowly. In order for the country to compete with Silicon Valley, it needs to ramp up, and quickly. With Google Inc.’s investment in Japan-based Schaft Inc. two years ago, American VCs are taking calculated risks on entrepreneurs that Japanese firms are turning down. According to data from Japan Venture Enterprise Center and the U.S. National Venture Capital Association, Japanese VCs investments into Japanese startups were overshadowed by U.S. investments into startups by a large margin.
In order for Prime Minister Abe to create a culture similar to the one he witnessed in California, the attitudes towards tech entrepreneurs will have to undergo some modifications. Japan’s robotic industry may help pave the way.