Japan is lagging behind other countries in terms of tech competitiveness.
The country is ranked 27th in the International Institute for Management Development (IMD)’s 2020 World Digital Competitiveness Ranking (WDCR).
The WDCR ranks the capacity of countries to utilize digital technologies for government, business, and society at large — meaning that Japan ranked below countries like Singapore and Malaysia.
This is contrary to the government’s plans to increase economic efficiency and productivity through digitalization — reflective of Japan’s growing need to find new and innovative technologies in software and big data.
As of today, a large part of Japan’s tech innovation efforts are stifled by its underdeveloped startup company ecosystem.
Despite tech startups being able to potentially improve innovation and motivate the development of new technologies, most large firms have been resistant to supporting them.
Japanese firms’ often secretive R&D approach and adverse attitude to investments in startups also hamper these efforts.
Case in point on Japan’s underdeveloped ecosystem that it only has 3 ‘unicorn’ startups (privately held startups valued at over $1 billion) whereas the USA and China have approximately 242 and 119 respectively.
The government must cooperate with private firms and give tax incentives to increase support for young startups, it could potentially improve the startup ecosystem and prospects for tech innovation over the decade.