The Last Word: Entrepreneurial Framework Conditions in Japan

The Global Entrepreneurship Monitor 2024/2025 Global Report was published, as usual also including country scorecards vis-a-vis their peer group.

The Global Entrepreneurship Monitor (GEM) 2024/2025 Global Report has been published, and as usual, it includes country scorecards vis-a-vis their peer group. The graph above shows the entrepreneurial framework conditions in Japan across 13 factors, and the report elaborates as follows:

For most entrepreneurs in Japan, the environment is improving due to an increase in the balance of small loans and the enhancement of consultation systems through local governments and other organisations. The Startup Development Five-Year Plan, formulated in November 2022, sets two main goals: to expand investment in startups to ¥10 trillion by fiscal year 2027 and to support the commercialisation of more than 5,000 university-based research results over a five-year period.

Support measures include building human resources and networks, strengthening entrepreneurship education (at all levels), strengthening funding supply and diversifying exit strategies.

The overall quality of the entrepreneurial environment in Japan is seen by its own national experts as having improved substantially in 2024, with its NECI (National Entrepreneurial Context Index) score up to 5.1 (placing Japan 15th of 56 GEM economies) from 4.4 (and 27th) the year before.

The NECI is the average of 13 individual Framework Condition scores, and while that overall measure is just better than sufficient, the majority of the Framework Conditions rate as less than sufficient (<5.0).

In the latest NECI, Japan has one condition scored as very good (≥7.0) (Physical Infrastructure), two scored as good (≥6.0) (Ease of Entry: Market Dynamics and Government Policy: Support and Relevance) and one rated as better than sufficient (≥5.0) (Entrepreneurial Education Post-School).

However, that leaves more than twice as many conditions rated as less than sufficient, including one scored as poor (<4.0) (Social and Cultural Norms) and one as very poor (as usual: Entrepreneurial Education at School).

So a very mixed picture overall, with too many of Japan’s Framework Conditions seen as less than sufficient, despite having three conditions ranked in the top 10 among the GEM 56 economies.

On a brighter note, women’s relative access to entrepreneurial resources is seen by national experts as better than sufficient, while new and growing businesses prioritisation of sustainability rates as good.