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In 2019, just over 10,000 French people lived in Japan and a significant number of them had decided to set up their own business there. Why would a French entrepreneur choose to settle in Japan? What are the different determinants that explain the creation of companies more than 9000 km from Paris in a country where the culture is so different from ours?

 

France and Japan share a rich history since the 19th century. An history of exchanges and mutual fascination. Indeed, this partly explains why the Land of the Rising Sun attracts so many French. Today, Japan is the world’s 3rd largest economy, one of the leaders of innovation and a stable country with a high quality infrastructure. The economic reforms of former Prime Minister Shinzo Abe, also known as “Abenomics”, have greatly helped to make the country attractive to foreign companies. However, Japan has not escaped the negative economic effects of the COVID-19 pandemic. Its economy, and by extension its entrepreneurial fabric, has suffered, despite the measures taken by the government to limit the damage. However, the pandemic, potentially, may also represent an opportunity for some innovative companies.

 

Supports to creation exist but its effectiveness is questioned by entrepreneurs

 

A French entrepreneur wishing to settle in Japan can enjoy many opportunities he can leverage. The support deployed by the various Japanese entities (JETRO, municipalities...) is often not financial, but provides a wide variety of opportunities: Facilitating administrative procedures, making premises available, putting in contact with experts…. The so-called special economic zones provide the Start Up Visa. This initiative greatly facilitates the establishment of a company in the country by a foreign entrepreneur. In addition to the Start Up Visa, many clusters allow the most innovative companies to benefit from a choice environment with a strong emphasis on innovation. The French community is not left behind. Government entities (Embassy, International Chamber of Commerce aka CCI...) provide a lot of information, while entities such as the French Tech Tokyo or the FAJ(1) provide advice and networking opportunities . It is observed that French entrepreneurs do not always take into account the various aids proposed. However, their feedback from experience on the effectiveness of these aids is variable to say the least.

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French Entrepreneurs in Japan: A common passion for the country

 

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However, these economic reasons and these support opportunities alone are not enough to explain why an entrepreneur will set up his company de novo in Japan. Although the display a variety of profile and experience, there are common denominators between the different interviewees profiles in this study.

• French entrepreneurs have often done long studies, often cumulating different degrees.

• He / she has working experience, even, sometimes but not always, entrepreneurial experience.

• He / she is sensitive to Japanese soft power. This is the most interesting common denominator. Entrepreneurs have often been exposed, from an early age, to Japanese culture: Sports, animation or literature are among their main influences.

 

Interestingly, there is an overall concentration of French entrepreneurs in the same prefectures as their Japanese counterparts. However, while the majority of these are based in Tokyo, some have chosen to settle in Kansai, Kyushu, or elsewhere... The determinants of installation vary, but the main reason for the choice is the presence of clients in the chosen geographical area.

 

True: Japan is a rich, attractive country and is developing its entrepreneurial ecosystem. But beyond the challenges related purely to entrepreneurship, the entrepreneurs interviewed tell of their difficulties with the local legal framework, Japanese customs, the way of doing business or simply the hassles of everyday life. Nevertheless, these difficulties tend to fade over the years. The presence of a Japanese life partner also tends to significantly reduce this type of risks.

 

Other important points emerge from this study. French companies in Japan are innovative, each in its own way. While innovations are mainly incremental, they tend to focus on the creation or adaptation of a new product, adapted to the Japanese market. Even in this context, few companies file patents, despite the facilitations deployed by the Japanese government. Moreover, while no companies interviewed claim to have links with academic structures or research laboratories, there are still some collaborations in some specific cases (e.g. Le Wagon X Toyo University). Innovating is difficult, and beyond the usual difficulties of public / private collaborations, Japan’s highly vertical structural organization seems to be a vector of problems..

 

In this study(3), I also wondered about the role of French nationality and foreign status in the success of a French company in Japan. Japan is quite a Francophile country, and the notion of “French” inspires at least enthusiasm and curiosity. This is certainly a positive factor even if distances described by Pankaj Ghemawat(2) remain topical..

 

So, is Japan the country to start your company? A strong economy, stable political landscape and a high tendency to innovate makes Japan quite an attractive country for entrepreneurs. But creating a company in Japan isn’t a mundane task. Support come from various sources their efficiency varies a lot. The local culture and business habits are also very different and important to consider.

 

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Passion is needed in entrepreneurship but does not make a business model fly

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Entrepreneurs moving to Japan aren’t rookies, although they are not necessarily veteran either. But more than anything, they seem to have in common an attraction not to say a passion for Japan that come from the effects of Japanese soft power or family relationship.

 

Passion is needed in entrepreneurship but does not make a business model fly. If you intent to move to this fascinating country, make sure you do not disregard the fundamentals of business or your dream may turn into a nightmare.

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Note :

1. Femme Actives Japon – Active Women in Japan

2. Ghemawat, P, Distance Still Matters, harvard business review • september 2001

3. Study run in as final dissertation of for Master 2 “International Affairs & Corporate Strategies  en 2022” (IEP Toulouse).