A new call for applications for Startup Cities has begun. In fiscal year (FY) 2020, the government selected eight Startup Cities. However, the end of the fiscal year is the term limit for the project's current key performance indicators (KPIs). Therefore, the government has drafted a fresh basic approach and begun accepting new applications for Startup Cities. (The deadline for applications is March 4, 2025.) There have been growing calls to create university-launched startups in cities other than the selected eight cities. Therefore, the government plans to reorganize the project's framework. The current two categories will be expanded to three categories. Moreover, several new cities will be selected as NEXT Global Startup Cities in addition to the existing Startup Cities. The decision will be made around June.
The Minister of State for Science and Technology Policy Minoru Kiuchi said the following: "I have visited companies and research institutes nationwide and exchanged opinions with people involved in startups. In doing so, I have strongly reaffirmed the significant role that startups play in these regions. We strongly hope that the consortiums, led by local governments, will make ambitious and positive proposals. These will lead to the formation of further ecosystems."
In FY2020, the government selected eight locations as Startup Cities—Tokyo; Nagoya and Hamamatsu (central); Osaka, Kyoto, and Kobe; Fukuoka; Sapporo; Sendai; Hiroshima; and Kitakyushu. The aim is to create and develop a world-class Japanese startup ecosystem. Each city established KPIs for the end of FY2024. Startups are supported by industry, academia, government, and finance consortiums. Startup-related activities are increasing in each of the Startup Cities. Therefore, the collaborating stakeholders are set to achieve their KPI targets. These targets include the number of startups created locally, the number of projects that solve administrative issues, and number of business matches. However, indicators such as the amount of funds raised are still in the development stage. Connections with overseas ecosystems are still too weak. Therefore, profitable startups that can boldly enter the global market and grow there are still waiting to be developed.
The number of startups is not the only concern; expanding the scale of startups is also important. This point was addressed in the Startup Development Five-year Plan decided by the Council of New Form of Capitalism Realization. Published in November 2022, the plan sets a goal of increasing investment to 10 trillion yen over the five years to FY2027. This is more than 10 times the FY2022 level.
Against this backdrop, there is a need to raise the Startup Cities to a global standard. Therefore, the current framework of participants in the Global Startup Cities and Startup City Acceleration Program is to be progressively reorganized. Formation plans for the current Startup Cities are being reviewed and revised. In addition, a call for formation plans for the selection of new cities has been issued. To accelerate startup growth, the Cabinet Office issued directives for Startup Cities to raise urban ecosystems to a global standard. In addition, as a "forum," the Startup City Project Network (SCPN) was launched in July 2024. The aim is to build various networks among the national government and the Startup Cities. In addition, five workshops were held.
The vision to be achieved in the next five years involves "creating a Japanese startup ecosystem that is integrated into the world and plays a major role, resulting from the creation of startups can grow globally and earn profits." The government plan outlines policy inputs that should be implemented from four perspectives: seamlessly connecting with the world; providing thorough support for the growth of startups; developing human resources through entrepreneurship education; and securing human resources and organizations that support ecosystems throughout Japan.
In the framework of the second phase of Startup Cities, all current Global Startup Cities and Startup City Acceleration Program participants are positioned as "Global Startup Cities." They are then classified into "wide-area network type" and "core city type" according to the characteristics of each city. Furthermore, the NEXT Global Startup Cities will use their region's distinctive industrial structure and resources to revitalize the local economy. They will do so while creating ecosystems that connect to overseas ecosystems.
Once selected, cities will receive additional points under the Global Startup Acceleration Program (Cabinet Office). Stakeholders within the Startup City area will be supported through the Program for Strengthening Startup Cities' Overseas Collaboration (Cabinet Office). The Japan External Trade Organization (JETRO) branches within the Startup Cities will offer comprehensive support to strengthen overseas collaborations. In addition, the Startup Ecosystem Co-creation Program for the New Industry Creation Fund for University Startups and the Startup Ecosystem Formation Support Program for New Industry Creation from Universities (START; Ministry of Education, Culture, Sports, Science and Technology) are involved. These programs provide entrepreneurial support to platforms formed by core universities and other institutions in Startup Cities. This goal is achieved by building an integrated support system that includes practical entrepreneurship education and fund-raising.
The Ministry of Economy, Trade and Industry is running the Project for the Development of Incubation and Industry-Academia Fusion Centers in Regional Core Universities. In this project, industrial clusters centered around regional universities will be created by establishing incubators, joint research facilities, open innovation facilities, etc. at regional universities and promoting industry-academia collaborative research and startup creation. The project is intended to contribute to the sustainable growth of regional economies through innovation.
In the future, the Cabinet Office plans to work with relevant ministries as envisioned in its basic approach. It will put together a concentrated support package for Startup Cities by around summer 2025. The aim of this project is to strengthen the support required to raise urban ecosystems to a global standard.
This article has been translated by JST with permission from The Science News Ltd. (https://sci-news.co.jp/). Unauthorized reproduction of the article and photographs is prohibited.