Newsletter Signup
Join Our Community!
Stay updated with the latest news, exclusive insights, and more.
Stay updated with the latest news, exclusive insights, and more.
To see how we may use your information, take a look at our privacy policy.
.jpg)
Japanese startups tend to focus on new technologies and services, but in fact, the world is paying more attention to "dead technologies" that are common in Japan. At the same time, however, there are many companies that cannot avoid going out of business due to a lack of successors, and a major issue is how to preserve the technology that lies dormant in Japan for the next generation.
According to the Five-Year Business Succession Plan released by the Small to Medium Enterprise Ministry, the average age of small and medium business owners has moved from 47 to 66 during the 20 years from 1995 to 2015. Furthermore, it is estimated that in the five years from 2015 to 2020, approximately 306,000 business owners will reach the age of 70, and 63,000 will reach 75.
The problem is that 60% of such companies have no successor yet, and only half of the managers in their 70s are preparing for succession. And more than half of the managers over the age of 60 plan to close their businesses.
Data shows that 30% of the companies that plan to close their businesses are doing better than their peers, and if they go out of business then the Japanese economy and business ecosystem will lose the technology and know-how they possess.
In order to solve this problem, the Small and Medium Enterprise Agency has established the Five-Year Business Succession Plan to "firmly hand over local businesses to the next generation and create an environment that encourages successors to actively take on new challenges.”
The plan calls for the establishment of a regional platform to support business succession and a small-scale M&A market over a five-year period. This Venture-Type Business Succession is introduced as a model for business succession.
reference: https://tomoruba.eiicon.net/articles/1717
Washi (Japanese paper) manufacturing:
Washi is produced using traditional methods unique to Japan, and its paper making techniques are known for their high quality and delicacy. Washi is widely used for painting, calligraphy, and as a material for traditional Japanese clothing.
Japanese Brewing (Sake):
Sake is highly regarded throughout the world, and its brewing techniques are unique and sophisticated. Sake is brewed with a perfect combination of rice, water, koji (malted rice), and yeast, refined over a long history of brewing. The taste of sake varies from region to region and is determined by the skill and experience of the brewer.
Bamboo Craft:
The crafting of bamboo crafts and utensils is a technique that takes advantage of bamboo's flexibility and strength. Bamboo crafts are used in Japanese gardens, tea ceremony utensils, furniture, and lighting fixtures, and are highly regarded for their design and durability.
Rice Cultivation:
Japan's primary industry boasts a high level of technology and tradition, especially in rice cultivation. Japanese farmers are highly skilled in managing rice paddies, selecting rice varieties, and using pesticides, all of which contribute to the production of delicious rice. In addition, seasonal work and harvest festivals are an important cultural component of Japanese agriculture.
Venture-type Business Succession is defined as the creation of new value for society through the creation of lasting management by young successors, utilizing the tangible and intangible management resources inherited from their predecessors, boldly confronting risks and barriers, and challenging new business, changing business categories, entering new markets, and other new areas.
Creating new markets is the same as a venture company, but it has advantages that venture companies do not have.
Please share your thoughts on the impact of the lack of successors on Japanese society.
Japan is the world's longest-lived corporate nation, and many of these companies are family-owned. People talk about family businesses as being somewhat exclusive, privileged, and dimly-lit; but unlike entrepreneurs, successors feel strongly that they are in charge of the company, and many of them believe that their mission is to keep the company alive.
Who wants to keep the company alive somehow?
In fact, many successor presidents have created new products and services based on their existing management resources and their own strengths in order to remain a company that is needed by society. In this sense, I fear that the trend toward easy M&A due to a lack of successors may reduce Japan's competitiveness from a long-term perspective.
reference: https://sogyotecho.jp/yamano-atotsugi-interview/
What are the necessary elements for those who are considering becoming a successor?
A healthy sense of urgency and ambition. I believe that times will become increasingly uncertain. No one can decipher the future. There must be a sense of crisis that allows you to look directly at whether or not your parents' business will be able to do what it is doing in 10 years if they continue the way they are doing it now.
And you must want to do a business that excites you, not at the expense of your parents. I think it is whether you can have the idea of ‘pulling the family business closer’ to the business you want to do. A successor is humble, for better or worse, because they did not start the business from scratch. So they have unconsciously set a limiter on the family business and themselves. But it is the successor themself, who will redefine the family business over the course of the next 30 or so years. What kind of family business will they should leave behind? The managers of many of our venture-type business succession cases are also people who have repeatedly asked themselves this question.
reference: https://sogyotecho.jp/yamano-atotsugi-interview/
Japan is a small island nation with few natural resources, but it has been able to develop economically because it is based on the idea of passing on the values entrusted to us by our predecessors to those who will live in the future.
In an age when social issues are becoming more serious around the world, we are likely to live in a society where survival is prioritized over expansion. Instead of the ‘scrap and build’ approach that was once popular, we believe that the Japanese approach to business succession will become the high road, where people who are committed to the survival of the company redefine the value of the current business and company, and update it to meet the needs of the future. I look forward to the challenge of all successors, not only in Japan but around the world.
Although Japan was at the top of the world in manufacturing, it fell far behind the U.S. and China in the age of web services. However, the era of web services is coming to an end, and business is entering its next phase.
Although the next era is not yet clearly in sight, Manufacturing + IT is one of the leading candidates. There is a great opportunity for Japan to leverage its technological prowess to once again become a business powerhouse. The keys to this may lie in Venture-Type Business Succession and ‘dead technologies.’ Of course, the latest technology is important, but why not take a look at Japan's long-established small to medium enterprises as well? These companies offer knowledge and quality developed over many years and have the potential to contribute to the development of new businesses.
Entries for Successor Exhibition Now Open!
The Successor Exhibition is a pitch event for successors under 39 years old to compete for new business ideas utilizing existing management resources, where successors from all over the country present their new business ideas based on the questions "what new products or services can we offer?”
The deadline for entries is noon December 15th, and the deadline for nominations is noon December 11th.
Those who pass the document screening will proceed to the regional competitions, which are divided into five blocks: Hokkaido and Tohoku, Kanto and Chubu, Kinki, Chugoku and Shikoku, and Kyushu and Okinawa. A total of 15 finalists from each regional competition will make presentations at the finals, where one Grand Prize winner and four Excellence Award winners will be selected.
For more information, including application details, please visit the official website of the Successor Exhibition.
.png)
.png)
.jpg)
.jpg)
