Young Academy of the Science Council of Japan conducts survey on university-based startups

The Young Academy of the Science Council of Japan has published a statement titled "Toward Innovation Creation with Academia and Startups as Two Wheels." According to the Council, this is the first time it has formally expressed a position on university-based startups.

Shutaro Takeda, chair of the Subcommittee on Academic Innovation for the Future and associate professor at the Graduate School of Media Design at Keio University, said: "Our survey found that many researchers start companies because they want to contribute to society through their own research outcomes. To support such efforts, we need evaluation systems and institutional frameworks that allow researchers to pursue social implementation without interrupting their careers."

The number of university-based startups in Japan has grown twelvefold over the past decade to 5,074 companies. However, only eight have reached unicorn status, accounting for just 0.6% of the world total.

To generate major innovations in deep-tech fields such as AI and nuclear fusion, Japan must build an ecosystem that improves quality, not just quantity.

To clarify the actual situation facing researchers and entrepreneurs, the Young Academy conducted a questionnaire survey of 906 "researchers who were university faculty members at the time they founded a company," drawn from the Ministry of Economy, Trade and Industry's database. It also analyzed research output trends for 603 university faculty members at 487 companies whose names appear in the database.

The results of the survey showed that the entrepreneurial purpose of the researchers is not economic profit, but to solve social problems through research (93.5%).

Regarding the impact of entrepreneurship on their research careers, 42 out of 45 respondents said it had been positive. At the same time, starting a company led to a shortage of resources such as research time and the number of papers published.

As for balancing research and entrepreneurship, more than 90% said they found it rewarding and meaningful, and more than 70% saw future potential in it.

However, they said they need institutional support for maintaining that balance, such as more flexible rules on side employment and reduced administrative burdens, as well as financial startup support. Nearly 60% of the respondents would like to continue to be both researchers and entrepreneurs in five years.

Meanwhile, an analysis of how entrepreneurship affects research output, tracking the number of papers published in the five years before and after founding a startup, with the year of founding set as year zero, found no clear trend of significant increase or decrease in the number of papers published.

The statement puts forward five recommendations.

The government's target of "50 startups and 1 exit per university" (5-year startup development plan) should be reviewed and the target should be changed to qualitative indicators such as the number of unicorn companies and the creation of impact startups that aim to solve social issues.

To ensure continuity in researchers' careers when they start a company, mechanisms should be introduced to guarantee that continuity, such as an entrepreneurial sabbatical leave system and the maintenance of eligibility to receive Grants-in-Aid for Scientific Research grants. The experience of founding companies and implementing research in society should be appropriately incorporated into university faculty personnel evaluation processes.

The government and universities should identify promising research laboratories and provide accompanying support in the form of Entrepreneurs-in-Residence (EIR) placements and market needs validation, thereby cultivating an environment in which multiple startups can be launched successively from a single laboratory.

Gap funds such as START should be expanded and Japan's version of the SBIR program be strengthened. Investment restrictions on university venture capital funds should also be relaxed, for example, by promoting the hiring of private fund managers and allowing investment in technologies originating from institutions other than national universities, so that university VCs can operate more actively.

To foster deep-tech startups, open laboratories should be created by bringing together regional resources and building partnerships among universities, national research institutes, and private companies, enabling startups to access advanced equipment at low cost. In doing so, private risk capital as well as public funding should be utilized.