From Disaster to Future: Sendai City's Startup Challenge - Koji Sakai (City of Sendai)

We spoke with Mr. Sakai from Sendai City about how the region's entrepreneurial support evolved after the earthquake, the growth of their unique startup ecosystem and their vision for the future.

Professional Background and Current Role

Could you tell us about your background and current role?

I currently serve as the Director of the Startup Support Section at Sendai City's Economic Affairs Bureau. While our Section primarily focuses on startup support, we've also been providing entrepreneurship support for small businesses like cafes, restaurants and tutoring schools for over a decade.

The entrepreneurial spirit in this region became particularly active after the 2011 Great East Japan Earthquake. This disaster changed many people's life perspectives, inspiring a strong desire to help rebuild the region. Not only did local residents step up, but many Tohoku natives returned home thinking 'I must come back and do something to help,' and even those who had been successful overseas committed to Tohoku, saying 'the earthquake made Japan my true home.' This led to the emergence of many entrepreneurs driven by a strong desire to help others, their community, and society.

Since 2012, dozens of Harvard Business School MBA students have been visiting Tohoku annually to engage in discussions with local social entrepreneurs. These students often tell us that 'learning from Tohoku's entrepreneurs helped them reassess their own missions.'

The MBA students excel at the 'outside-in' approach, analyzing economic conditions, markets, industries and competitors for business decision-making, providing valuable insights to Tohoku entrepreneurs. Meanwhile, Tohoku's social entrepreneurs employ an 'inside-out' approach, creating businesses from their strong inner desire to help others and their community, which provides significant learning opportunities for the students.

As for my personal experience, I was seconded to JETRO in 2006 for two and a half years, including an eighteen-month position in Silicon Valley. I was responsible for supporting Japanese startups entering the US market, managing JETRO's incubation facilities, providing support for tenant companies, offering legal and accounting assistance, collaborating with serial entrepreneurs and consultants, organizing networking events and coordinating short-term Silicon Valley programs for young Japanese professionals. These experiences greatly influenced my current work.

Sendai City's Characteristics

Could you tell us about Sendai City's unique features and attractions?

Sendai is a city where history and modernity coexist harmoniously. Our tourist attractions include Matsushima, one of Japan's three most scenic views and the renowned Akiu hot springs, drawing many domestic and international visitors. The city is dotted with historic sites associated with Date Masamune, a prominent feudal lord from 400 years ago, including his mausoleum Zuihoden and the Osaki Hachimangu shrine he built. The equestrian statue of Date Masamune on Aobayama hills offers a popular viewpoint overlooking the city.

In the city center, along Jozenji-dori Avenue, stands the Sendai Mediatheque, designed by Pritzker Prize-winning architect Toyo Ito, with its innovative structure and beauty coexisting with traditional alleyways, creating a streetscape where tradition meets innovation.

In terms of industry, unlike Aichi Prefecture's automotive sector, we don't have a dominant core industry. Instead, we maximize our intellectual resources through Tohoku University, focusing on supporting deep-tech startups, commercializing research outcomes and impact startups primarily addressing social issues. Notably, our vision extends beyond Sendai to encompass the entire Tohoku region, emphasizing both economic success and regional contribution through social problem-solving.

Sendai's major strength lies in the close collaboration between industry, academia, government, and financial institutions. Our compact city size facilitates close relationships and smooth cooperation among stakeholders. Tohoku University is particularly active in entrepreneur development, offering comprehensive support through facilities like the 'Startup Garage' for students, the 'GAP Fund' for researchers' business model validation and investments through Tohoku University Venture Partners.

Thus, Sendai has developed a unique ecosystem that combines rich history and culture with cutting-edge research, a social problem-solving mindset and entrepreneurial support. Our greatest asset is the environment that enables close collaboration among relevant organizations.

Startup Support Initiatives

Could you tell us about Sendai's startup support initiatives so far?

Sendai City's full-scale entrepreneurship support began in 2013 when our mayor declared the goal of becoming 'Japan's most startup-friendly city' and launched the 'SENDAI for Startups!' event. What started with around 80 participants and has now grown into a major event attracting over 2,000 attendees annually.

We also established 'Ashi☆Sta,' a specialized support desk for aspiring entrepreneurs. This led to a five to six-fold increase in consultations, now handling over 1,000 inquiries annually.

In 2017, we launched two accelerator programs: the 'Tohoku Growth Accelerator' supporting high-growth university startups and the 'Tohoku Social Impact Accelerator' for social entrepreneurs. Each program selects about 10 companies annually and offers them six months of intensive support. Over the past seven years, we've supported more than 180 entrepreneurs, many of whom continue to grow steadily.

In 2019, we established the Sendai Startup Ecosystem Promotion Council, and in 2020, we were selected as one of the 'Startup Ecosystem Hub Cities' by the national government. That same year, we launched 'J-Startup TOHOKU' in collaboration with the Tohoku Bureau of Economy, Trade and Industry. In 2022, we formulated the 'Sendai Startup Strategy' to strengthen support systems and implement strategic measures.

Last April, under strong mayoral leadership, we significantly increased our budget and personnel, establishing the new 'Startup Support Section.'

Previously, startup support was part of industrial promotion, but now it's an independent specialized department, enabling more strategic and comprehensive support.

International Startup Support

Could you elaborate on your international startup support initiatives?

We're implementing several initiatives to connect our region's startup ecosystem globally. First, we introduced the 'Startup Visa' program early on, like other advanced cities in Japan. This visa allows foreign entrepreneurs to stay in Japan for up to one year to pursue their startup activities.

For students and young people, we've signed an MoU with Coursera, Inc. to provide cutting-edge entrepreneurship education from Western institutions. We also offer programs including classes by a former Harvard Business School professor and a four-week online course followed by visits to innovation hubs in Boston and Silicon Valley. We regularly invite accelerators from Silicon Valley for individual guidance and lectures.

We actively support participation in international exhibitions like SWITCH in Singapore and BIO-Europe in Sweden, helping local companies expand internationally.

We also provide support programs for international students. This year, we held special events exclusively for international students to facilitate closer communication. We discovered many are interested in entrepreneurship but often feel isolated or lack the proper  information. In response to this, we're planning projects that connect startup support with international student community building.

Startup Exchange Hub

Could you tell us about your startup networking hub?

The 'Sendai Startup Studio,' opened in March 2024 in the Urbannet Sendai-Chuo Building, serving as our main networking hub and aiming to connect various startup support facilities in the region.

The facility houses a consultation desk for startups and aspiring entrepreneurs, staffed by experienced professionals. Uniquely, we have a city official permanently stationed there to facilitate direct access to our networks in both the metropolitan area and locally.

The studio offers comprehensive support including consultations, events, intensive support programs, mentors' box, startup consultation for foreigners and an advisory board. It's designed to be more than just an event space, functioning as a venue for ongoing support and networking.

Previously, even after large events, participants would lose touch until the next gathering. With the Startup Studio, we can host various events weekly, creating a regular gathering place for entrepreneurs and supporters.

This continuous exchange space facilitates for both chance encounters and purposeful connections. We're seeing increasing numbers of repeat visitors, and our strengthened collaboration with Tohoku University has led to a more active student participation.

Future Prospects

Could you share your future outlook?

We've already achieved concrete results, surpassing our targets with 370 startups created (against a goal of 300) and securing 6.22 billion yen in funding(exceeding our 5 billion yen target).

Building on these achievements, Tohoku University has set an ambitious goal: creating 1,500 startups over the next 25 years. This KPI was established as part of their bid for International Excellence Research University status. While about 200 startups have emerged from Tohoku University so far, we recognize 1,500 is an ambitious target, and Sendai City needs to accelerate its efforts to support this goal.

Our initiatives are driven by a strong sense of urgency about the region's future. Sustainable development of Sendai and the Tohoku region requires new industry creation. Fortunately, Tohoku University possesses some of Japan's top research seeds. We believe our path to success lies in how effectively we can commercialize these research outcomes through startups.

Inaction would only lead to regional decline. Driven by this sense of urgency, we envision a future where industry, academia, and government unite to create new value. This is Sendai City's vision for the future.

Editor's Note

Through our interview with Mr. Sakai, we were struck by how the earthquake strengthened Sendai City's collective desire to support the region, attracting people from outside the prefecture and globally who share this sentiment. In Sendai, where history and innovation harmonize, their approach to leveraging local resources for startup support and regional problem-solving was particularly impressive.

The strong unity of the region is evident by their collaboration with Tohoku University and the creation of sustainable networking spaces through the Startup Studio. It was fascinating to see how Mr. Sakai's Silicon Valley experience contributes to their globally-minded support system.

Sendai City's journey of overcoming disaster and advancing toward their goal of "From Tohoku to the World" is truly inspiring. Mr. Sakai's words reflected both a strong belief in the region and a warm desire to support entrepreneurs.

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