Kyoto’s emerging start-up ecosystem has been gaining momentum and climbing the rankings. While still relatively small compared to its neighboring cities and key players in the Northeast Asian region, it has shown promising potential for entrepreneurs looking to establish their start-ups.
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Overview of Kyoto Startup Ecosystem – The City
Kyoto is a city of 1.4 million people that is known as the cultural capital of Japan. It is home to iconic landmarks like the Fushimi Inari Taisha Shrine, and numerous temples, tranquil gardens, and samurai castles that have been recognized by UNESCO as World Heritage Sites. Once the capital of Japan, Kyoto has seen its tourism industry rise steadily, with a record-breaking 88 million tourists in 2019. Kyoto was also voted Best Big City in the world in 2020, beating the winner of the last four consecutive years, Tokyo.
In addition to its solid background in social and leisure industries, Kyoto has been developing fast in areas of innovation and technological development. Already a center for the manufacturing and hardware industry, Kyoto is now transforming into a modern capital of innovation.
In the last couple of years, the startup ecosystem has been strengthened through the presence and collaboration of larger players and global companies. Support from the public sector has also increased, with the introduction of a new startup visa in 2020. This will allow the ecosystem to progress rapidly, attracting international investors and foreign entrepreneurs alike.
Government industry and academia support have also been integral in the steadfast growth of the ecosystem, with initiatives such as the “Kyoto Innovation Belt”. The area will establish a closer connection between research facilities, innovation centers, and technological parks in the city.
Insights from Data on Kyoto
Kyoto has registered an impressive jump in the rankings of 2020, moving more than 129 positions to sit at rank 251 globally. It is the fourth strongest Japanese city, following Tokyo, Osaka, and Nagoya. Business developments have led to an upward surge in all Japanese cities this year, including Osaka, which made an impressive jump of 116 spots, and newcomers Nagoya and Sapporo (in rank 666). Kyoto is 38th in the Asia-Pacific region, with a strong presence in the verticals of hardware, health, and the social and leisure industry.
The support and implementation of changes, particularly in the public sector, have created a massive jump in Kyoto’s rankings. This is especially evident from the comparison between its 2017 ranking (807th), and its 2020 ranking (251st).
Startup Visa in Kyoto
One of the most exciting new developments in the startup ecosystem of Kyoto is the launch of the Startup Visa, which welcomes foreign entrepreneurs that wish to start a business in Kyoto. Interested individuals will be able to apply for a “Certificate of Entrepreneurial Activity Plan Confirmation,” and receive management support from industry specialists.
Special interest will be given to the fields of manufacturing, AI, and IoT, as well as renewable energy, culture, and tourism. These are very positive signs for the momentum of Kyoto’s ecosystem, since navigating tough immigration laws has been a challenge for investors and businesses in the past. Moreover, free co-working spaces, networking opportunities, and government subsidies will be available as well.
Notable Startups in Kyoto
Kyoto boasts many significant global companies like electronics and game company Nintendo, and ceramics and electronic giant Kyocera, and manufacturing corporations like Murata and Omron.
HACARUS provides explainable, lightweight AI tools for the medical and manufacturing fields. It recently received the J-Startup KANSAI recognition at Kansai Future Summit based on their growth and business potential. It also marked the only Japanese entry in CB Insights annualAI100 that highlights the most promising players in artificial intelligence.
Stroly offers an online platform for illustrated maps (the only Japanese finalist at the 2019 SXSW Pitch event in Austin, Texas). With Covid-19 disrupting tourism and the Olympics, Stroly have also pivoted their services online to include virtual guided tours.
AC Biode has developed the world’s first standalone alternating current (AC) battery. AC Biode recently took the 2nd place at virtual Global Business Competition #GBC2020 in Queensland Australia with their Plastalyst (a catalyst solution that can decompose plastic in an eco-friendly manner)
Ship & Co is a tech startup that was birthed out of the logistical nightmare of shipping bento boxes to international customers. It has been steadily expanding its business overseas, with new solutions for transportation arrangement and inventory management to address common problems.
Atomis – a tech startup from Kyoto University that is developing the next generation of high-pressure gas material focusing on sustainable methods through the technology of manipulating gases freely. They won the “Best Domestic Startup Award” in Plug and Play’s first virtual EXPO in May 2020 and will have the opportunity to pitch to select VCs.
Important Players in the Kyoto Startup Ecosystem
Plug and Play Kyoto – the Silicon Valley-based accelerator and corporate innovation platform opened its second location in the country in Kyoto in 2019 and is partnering with major Japanese companies including Kyoto-based Shimadzu and Kyocera.. Particular interest is geared towards the health industry innovation.
The Kyoto Research Park (KRP) – First opened in 1989, Kyoto Research Park is a local innovation hub and business creation support space. It links together industry, government and academia services to contribute to the development of the Kyoto region.
Monozukuri Ventures – drawn by a large number of university students and number of manufacturing companies, Monozukuri Ventures chose Kyoto as the base of their operations and is currently active in New York. The venture capital firm started in 2015 and has invested in 27 startups in Japan in areas of hardware, IoT and advanced manufacturing.
Kyoto University– Famous for producing the most number of Nobel Prize laureates in Japan, Kyoto University has historically supported innovation and funding creating a dynamic force of top-quality researchers in their respective fields.
Kyoto Startup Summer School – An intensive 2-week program covering workshops, panel discussions, company visits and lectures that brings together entrepreneurs, academics and new practitioners looking to become a future entrepreneur.
With thanks to JETRO Kyoto and the Kyoto Prefecture for their support in the preparation of the annual Startup Ecosystem Ranking Report that ranked Kyoto in spot 251 out of 1,000 cities in 100 countries.