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Entrepreneurs in Japan need support to grow and prosper

BBC News, 31 March 2015 - In September 2012, 18-year-old Doga Makiura made his first trip to Rwanda, a country which many Japanese would only associate with the genocide in 1994.

His aim was to give children in rural areas an access to education. As a member of non-profit organisation e-Education Project, he travelled across the country for the next year.

"I filmed some of the best teachers' classes in big cities, burned them onto DVDs and showed them to students in rural areas," he says.

He chose DVDs because internet connection was hard to come by. In the first year, Doga visited more than 700 students in five schools. The examination results at those schools improved by 46%.

"In developed countries, kids complain about having to do homework, but these Rwandan children were thrilled to be able to learn, which made me happy."

During one of his trips, he noticed piles of food that were in storage. Farmers were too poor to transport them to big cities.

Through United Nations workers whom he met in Rwanda, Mr Makiura decided to facilitate the transport of food between the farmers and hundreds of thousands of refugees who were fleeing the civil war in neighbouring Democratic Republic of Congo.

That was less than two years ago.

Today, he is based in Bangkok where he has started his own company. His passion remains the same: to raise the living standards of people in developing countries.

This time he's doing it through a mobile phone application called Personal Data Bank. The app is still in the early-development stage, but the aim is to build a more efficient infrastructure by analysing the locations of people who are using the app.

Mr Makiura is an atypical Japanese youth. Above all, he is not afraid to take risks. And his global vision and entrepreneurial spirit are exactly what the Japanese government wants to encourage.


Today, Japan has one of the lowest levels of entrepreneurship in the developed world, according to the Global Entrepreneurship Monitor.

There are a number of obstacles.

Japan has long lacked venture capitalists who tend to invest in start-ups elsewhere in the world. And approaching banks for financing help, is a big challenge for entrepreneurs.

"I asked for funding through traditional financial institutions but they wanted to see balance sheets which we don't have," says Naoki Mita, who left his banking job to open detox spa Le Furo.

Mr Mita approached Mr Makiura and asked for him to be an adviser to the spa venture. And together, they managed to secure funding from investors abroad. But Mr Mita believes not many entrepreneurs would even consider raising money overseas.

"Thanks to my experience as an investment banker I could look outside Japan, but at home the gap between demand and supply in the capital market is severe," he says.

But the fundamental problem lies deeper than people's perspectives.

In a society that appreciates a conformist attitude, not following the usual path of becoming a salaryman - a company employee - is seen as too risky or even reckless.

The former boss of the once high-flying internet firm, Livedoor, Takafumi Horie challenged that view in the 1990s. Instead of graduating from elite Tokyo University and looking for a job, he dropped out and started his own firm.


"I couldn't care less about what people thought of me," he tells the BBC.

"I had no desire to become a salaryman or wear a suit," adds Mr Horie, who stood out in the conservative world of corporate Japan by wearing T-shirts to business meetings.

Under his leadership, Livedoor grew rapidly. He also made headlines by trying to buy a baseball team and running in a parliamentary election.

But in 2006, Mr Horie was charged with securities fraud and imprisoned for 21 months before he was released on parole. He has maintained his innocence and accused the prosecution of targeting him for his brash, unconventional entrepreneurship.

His arrest became known as the "Horie shock" and regardless of their beliefs about his guilt, other entrepreneurs from then on kept a low profile.

The support for start-ups that Prime Minister Shinzo Abe has announced is a turning point in people's perspectives.

Spirit 'lacking'

Today, there are more venture capital companies to help start-ups. The number of entrepreneurs is on the rise.

"What's lacking now is the true venture capitalist spirit - not just injecting capital but mentoring and helping the next generation grow," says special advisor to the Cabinet Office William Saito, adding that the government is trying to encourage that.

But Mr Makiura says many of his peers are still trying to get a job with big listed companies.

He says he is who he is today because when he was just 13, he decided to leave the comfort of home to study in the UK. He wanted to see the world outside Japan.

Mr Horie says the whole education system needs to change, because at the moment, it is only producing loyal soldiers who are good at following orders.

Half a century ago, Japan did produce a number of great entrepreneurs. They were the founders of Toyota, Sony and Honda who were unafraid to try something different.

But as the economy grew, Mr Saito says, the Japanese society became unforgiving towards failures, and this needs to change.

People like Mr Makiura are still too rare.

But Japanese youths who are unafraid to take risks may be the best way to jump start the Japanese economy.


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