Japan’s Startup Future

Traditionally underappreciated in Japan’s business environment, some women are choosing to strike out on their own.

Statistics on female employment in Japan make painful reading. Last year’s report by banking giant Goldman Sachs, “Womenomics 4.0: Time to Walk the Talk,” is a prime example. Although Japan now has a record-high female labor participation rate of 62.5 percent, this figure, the report says, remains among the lowest in the developed world. In Scandinavia and large parts of Europe, the numbers hover around the 70 percent mark.

Then there are the leadership stats. Less than 2 percent of board directors in Japan are women, compared with almost 35 percent in Norway and an average 15 percent in much of Europe. It’s a similar situation in politics, where, after the Lower House elections in December 2012, just 8 percent of parliamentarians were female. Figures from Iraq (25 percent) and Saudi Arabia (20 percent) offer some sobering context.

Such data helps to explain why some women feel their only option for a fulfilling career is to launch their own business. Women like Dr Hitomi Hayashi, whose decision to become a business owner was prompted by a lack of opportunity to progress as an employee.

Although Hayashi had established and run a successful international, English-speaking department within a large dental clinic in Tokyo, the Club Member says she became disheartened at her lack of advancement after more than a decade.

“I realized that in Japanese society the people at the top are all guys, and I was feeling less appreciated year by year,” says Hayashi. “I saw so many guys getting promotions ahead of me. I was just one of the workers, even though I was a specialist and offered different things to anyone else there. I wanted to prove to myself that I’m a good dentist, so I decided I had to start my own business.”

In 2013, Hayashi, who is in her 40s, opened her own English-speaking clinic. Her professional license enabled her to secure government subsidies. The clinic’s success, she says, has been down to her range of treatments and patient loyalty. She also says she has benefited greatly from the support of her family.

Hayashi now employs two English-speaking dentists and is planning to open a second clinic in central Tokyo. Even as a successful business owner, however, she hasn’t been immune to deep-seated attitudes toward women.

“Shortly after setting up my clinic, I joined a dental association in the hope of gaining some support and advice to help my new business. They invited me to a New Year party, and I turned up after work in casual clothes, like the ones I’m wearing now,” says Hayashi, dressed in black plants, black boots and an ivory-colored blouse.

“During the evening, one male dentist told me off in front of other people for not dressing conservatively enough for a female dentist. But for that, he said he would have introduced me to some people who could have helped me. The dental world is still very old-fashioned.”

More progressive, says fellow Club Member Mikiko Tago Andersen, 42, is the children’s clothing industry. Tago Andersen’s company, Kodomark, imports Scandinavian children’s clothing and sells items online, wholesale and through an outlet in a Tokyo department store.

“Before I started my own business, I worked in a Japanese, an American and a Danish company in Japan, all with lots of local hires [so the culture was still Japanese]. I felt disadvantaged being female in my previous career,” Tago Andersen says.

While the kids’ clothing industry is populated with lots of women, larger companies tend to be conservative, with male-dominated managements, according to Tago Andersen. “That’s difficult at times,” she says. “I am an owner, but [as a woman], I struggle, as I have no political power in that industry, even if my business is growing.”

Noriko Silvester, who founded and heads PR and marketing consultancy Candlewick, says she faces similar issues in her industry.

“Dealing with clients, there is no gender discrimination for me, but it is still rare to see many other female leaders at networking events. Japanese society is still male-dominated,” the Club Member says. “This causes issues for me sometimes. When it comes to something like the cosmetics business, women are well represented. But in some governmental authorities, it is predominantly male and their approach can make it difficult for me to work with them.”

In Japan, in particular, societal change can be painfully slow. But driven by a need to exploit under-utilized resources to cope with the economic implications of Japan’s aging society, Prime Minister Shinzo Abe has set clear goals for Japan to reach by 2020.

The government wants a 30 percent female-representation rate in leadership positions (currently under 15 percent) and a female labor-participation rate for ages 25 to 44 of 73 percent (now 68 percent). It is also aiming for 55 percent of women to return to work after their first child (now only 38 percent) and 13 percent of fathers to take paternity leave (currently 3 percent).

Pointing to these targets, Club Member Noriko Nakamura says she is confident of improvements in the work environment for women, including in business ownership. As the founder of the Japanese Association of Female Executives and the founder and CEO of Poppins, which operates almost 150 nurseries in Japan and one in Hawaii, Nakamura is well placed to comment.

“Prime Minister Abe’s appeal to promote women in the workforce is succeeding. With support from organizations like the Keidanren [Japan Business Federation], there will be many new female executives, officers and unaffiliated directors debuting at corporations in a wide variety of industries,” she says. “Additionally, there is now good childcare support for women not to have to quit working after childbirth, and support measures, such as the ability to work from home and flexible work hours, are beginning to be offered [to mothers].”

Since starting her business in 1987, Nakamura, who turns 66 this month, has witnessed many positive changes in the childcare industry, allowing more women to continue careers or take on part-time work while raising families. Up until 2000, for example, the government wouldn’t authorize private nurseries. Through a combination of private and public facilities, there are now 24,000 authorized childcare facilities in Japan.

Another step forward is the recent decision by Tokyo’s Chiyoda Ward to subsidize nanny services to encourage women to work, something Nakamura believes will be adopted by more local governments.

But there is still work to be done when it comes to female entrepreneurship, according to Nakamura, who says there are few prominent female role models and their success is limited to certain industries.

“When starting up businesses, women tend to be successful in the service industry. There are many examples in people services, such as care work, and also education, public relations and fashion-related industries. On the other hand, there are fewer examples of female success in the manufacturing and IT industries. This begins at an early age, as there are very few girls interested in studying science subjects at school. One challenge is to change that,” Nakamura says.

Although female-run businesses in Japan often survive longer than those run by men, they usually remain smaller enterprises, she adds.

“Women are more inclined to start a business based on actual life experiences and their current resources. They are more inclined to run their businesses to suit their current scope, rather than expanding, while men tend to take on challenges with goals that have a higher risk of failure, such as expansion and getting to an IPO, so they fail more as a result.

“However, many women also go into business ownership without a general business or management background and often don’t have the business skill sets, such as marketing skills or business mentality, needed to grow into big businesses,” Nakamura says.

One solution, says Silvester, 53, is mentorship. “It’s very important to have access to business advice,” she says. “I set up my business by myself, but also had help from a mentor in the PR industry, who gave me advice on things, such as pricing and so on.”

Despite improvements, childcare remains a hurdle for many women and is a major reason why they don’t pursue careers after childbirth, says Tago Andersen.

“Now my kids are 9 and 6, but when they were small, we had to have babysitters and my parents would help out so I could run my business. My husband also works from home often, so he can often do school runs. Not everyone has that or easy access to childcare, and childcare can be very expensive,” she says.

To tackle the problem, the government wants to be able to provide childcare for another 400,000 children by 2017. That’s good news, says Nakamura, but it means the country needs an additional 70,000 trained nursery teachers.

“We say that there are about 1 million qualified nursery teachers but that only 40 percent are working. The reason that 60 percent choose not to work is because the hours are often long, the salary low and the job hard. My fight now is to improve that,” Nakamura says.

Of course, many issues apply to both male and female entrepreneurs. Countless reports have highlighted Japan’s ingrained fear of failure that is partly stifling entrepreneurship, as well as a lack of venture capital and the dominance of large companies. The regulation-ridden process of launching a business can also deter many would-be entrepreneurs.

For Club Member Julia Spotswood, who owns Jet Set, a blow dry bar in Hiroo, where customers can have their hair styled while unwinding with a glass of Champagne, the challenges starting her business last year related to introducing a new concept to the Japanese market and dealing with red tape, not gender.

“I don’t think it’s a case of male or female when starting a business; it’s more about who you know or don’t know,” says Spotswood, 40, who took a year to turn her business plan into an up-and-running venture. “It can be a slow and, at times, frustrating process, but the people you meet along the way and experiences you gain make every day exciting.”

Hayashi says there are even certain advantages to being a female business owner. “In one sense, women have more opportunities if they have a specific talent and the timing is right, because we aren’t expected to stay in a company,” she says.

Nakamura says another benefit is that female business leaders stand out, so are more memorable. Silvester agrees. “Being a woman is certainly a differentiating point. As a customer, for example, in comparison to men, we are the more experienced consumer, and that is something we can draw upon,” she says.

If Japan is to benefit from the talents of its female population, the final responsibility lies with women, says Tago Andersen.

 “I know that not everyone can do what they want, but I don’t like the mentality of women who make excuses for not trying because it is difficult. Women have to think about what they really want to do: business or non-business. Both paths are equally valid,” she says. “If you are in business, you have to cope with all kinds of issues and friction professionally, and you have to make a profit as well as finding self-fulfillment. You have to commit to it all. Ultimately, the key is within ourselves.”

Words: Rob Goss
Photos (from top): Julia Spotswood (Benjamin Parks); Dr Hitomi Hayashi; Noriko Nakamura; Mikiko Tago Andersen (Kayo Yamawaki)