[talk] Will Japan Reward Challengers in the Future? "Venture Business Forum"

Takaaki Kamei: Dentu Inc. and Senior Staff Member of Media & Contents Strategy Planning Division and executive director of Dentsu.com.

Takaaki Kamei works for Dentsu Inc., serving as a senior staff member of Media & Contents Strategy Planning Division and executive director of Dentsu.com. He is engaged in contents finance and contents business development as well as venture capital business. Born in 1968, Mr. Kamei graduated from the Engineering Department of Tokyo University and entered Dentsu in 1991.

Hajime Tokuda: United Media K.K.

Hajime Tokuda founded United Media K.K. in 2001 for supporting venture businesses, after serving as deputy chief of the business development and planning division of Sumitomo Bank and general manager of the bank's Denen Chofu branch. He is a graduate from the Commercial Science Department of Chuo University.

Keiji Nagano: Director of New Media Japan Inc.

Keiji Nagano is managing director of New Media Japan Inc., engaged in venture investment and support in Japan and the United States. Mr. Nagano graduated from the Engineering Department of Tokyo University in 1980 and received his MBA from Columbia Business School in 1986. Hajime

Japan still sees IPO (initial public offering) bubbles, but accumulation of venture business know-how is limited along with the number of excellent ventures. Ventures themselves tend to depend on big companies. As Japanese business society changes, however, excellent people are increasingly leaving big companies to work in the venture business world.
Based on the Japanese situation surrounding the venture capital market, Mr. Nagano, who has taken charge of venture capital investment in the United States, says: "Compared with the United States, Japan has yet to nurture a wide range of investors accumulating know-how for long-term investment. Japan's venture capital market is very small and limited to speculative investment by a small number of people. This is the problem."

Mr. Tokuda, who has hailed from a big city bank, says: "Banks and other large Japanese companies maintain problematic old-style evaluation systems for assessment of ventures. Japanese banks have failed to take the real advantage of the Big Bang financial deregulation."

Mr. Kamei, who runs a venture investment company, says: "Massive assets owned by an older generation should shift to younger people who are aggressive and willing to undertake investment. Japan has lost its attractiveness as an investment target and allowed massive funds to be invested in foreign government securities. This is one reason why funds for domestic investment are short.

The Big Bang financial deregulation had been designed to develop a securities market that is liquid and attractive for investors. However, funds of individuals have failed to flow into the securities market and financial institutions have yet to respond to the diversification of corporate finances including fund-raising actions. As a consequence corporate fund-raising market is still very small. If the Big Bang deregulation were to be successful, it should be accompanied by reforms of Japan's economic society as a whole, including nurture of sound>? investors, banking business reforms, and change of people's big company-oriented motivation. These reforms may take a long time. Venture businesses should accumulate success stories to create a favorable funding cycle and Japan should transform itself into a country where challengers are appropriately rewarded and supported. Such development may be all the more important.