TOKYO -- Japan's government on Monday released a growth strategy including plans to nurture high-tech startups into billion-dollar unicorns, hoping they will help propel the country to the forefront of the worldwide digital economy.
The strategy laid out by Japan's Council on Investments for the Future, led by Prime Minister Shinzo Abe, targets the creation of 20 unicorns -- privately held companies with market caps seen topping $1 billion should they go public -- by 2023. Suggested means to that end include creating "sandboxes," in which regulations that restrict testing of new technologies can be suspended, as well as calling in entrepreneurs from overseas.
"We will make this year the start of a fourth Industrial Revolution," Abe said, citing automated driving, health care and digital governance as target fields.
The market appears keenly interested in Japan's leading unicorn Mercari, the flea market app operator.
These types of policies, geared to spur private investment, are said to be the "third arrow" of the prime minister's signature Abenomics package, following aggressive monetary easing and fiscal flexibility. Japan's parliament recently enacted a measure letting companies seek a regulatory freeze.
The growth plan also addresses the rise of major tech companies like Google or Amazon.com, whose core services represent platforms for other functions. Such businesses often amass huge quantities of all-important customer data, stirring fears that their effective information monopoly and advantageous market positions could enable inappropriate behavior. The investments council pledged to push countermeasures that soften requirements for companies to enter the market and ensure that users are treated fairly.
But Japan will also have to establish a way to steer money into startups. Startup funding in Japan is stuck at around $1.3 billion a year and is dwarfed by that in the U.S., where the figure is closer to $70 billion, and by China's $20 billion.
Both China's government growth strategy, "Made in China 2025," and Germany's "Industry 4.0" have received global attention. Japan's growth strategies, meanwhile, have gotten little coverage overseas, despite being issued every year.
Part of the reason for that is Japan's strategy is but a compilation of budget requests from each ministry, and lacks a coherent narrative to tie it together.
One element of this year's strategy involves creating a council that includes government and industry representatives -- such as employees close to production -- to discuss growth strategies for 2019 and beyond.