When the Land of the Rising Sun meets the Start-Up Nation

Japan and Israel are fundamentally different but have a lot to teach other, and a professor is doing his share to bridge the business gap

Members of the Waseda Business Forum at a recent event (Photo credit: Courtesy)
Members of the Waseda Business Forum at a recent event (Photo credit: Courtesy)

East is east and west is west, and Israel is somewhere in the middle. In recent years entrepreneurs, businesspeople, government officials, and educators from the advanced industrialized countries of the West, as well as the rising economies of the East, have flocked to Israel to learn the secrets of Israel’s start-up nation success. On any given day, you can find delegations from the US, Europe, and nearly every Asian country touring the high-tech centers in Tel Aviv, Herzliya, Tefen, and Jerusalem.

All except one Asian country, that is. While Israel imports plenty from Japan – about $2.5 billion worth of goods, more than any other Asian country except for China – Israel exports far less to Japan than to China and India, and only slightly more than to Taiwan and Thailand.

So why hasn’t Japan caught the “start-up” bug yet? “There are many reasons,” said Dr. Roni Bornstein, chairman of the Israel-Japan Friendship Society and Chamber of Commerce. “Japan has traditionally been very influenced by the dictates of Arab countries. The Japanese are very conservative, and don’t like to rock the boat. Given the fact that they import 90% of their oil, they tend to adopt the Arab viewpoint on many issues, including Israel.”

That conservatism permeates much of Japanese society. “Although it is beginning to change, with more Japanese youth studying in the West, the stereotype of the Japanese ‘salaryman’ who seeks work with a large corporation until retirement is still accurate,” said Bornstein. However,  jobs at large corporations aren’t as secure as they used to be, he said, and Japanese society, which is rapidly aging, is changing as well.

Which means that the time might be ripe to introduce the Japanese to Israel’s take on innovation, says Professor Kenneth Grossberg of Waseda University in Tokyo. Born and raised in the US, he was a pioneer in mergers and acquisitions in the Japanese market for US banks and went on to establish the first US-style retail banking strategy in Japan. In July 2001 he became the first non-Japanese professor granted tenure at the International Management (MBA) program of Waseda University in Tokyo (“the Yale of Japan,” Grossberg said), and in 2002 he founded the Waseda Marketing Forum. In between, he taught at Tel Aviv University and the Technion.

A common feature of business life in the West, the concept of a business forum, where businesspeople from different companies and organizations get together to share ideas is somewhat less known in Japan. That fact alone makes the Waseda Business Forum novel, but what really makes it novel is Grossberg’s determination to bring the message of the Start-Up Nation to Japan. And an even more novel idea, Grossberg told The Times of Israel, is the Start-Up Nation Tour he is organizing for Japanese students and business people active in the Forum.

“I got the idea when the book “Start-Up Nation” by Dan Senor and Saul Singer was recently translated into Japanese,” said Grossberg. “When you mention that book to businesspeople in Europe or the US, many people have heard of it, but surprisingly few here in Japan are familiar with it. The tour is really more an introduction to the Israeli start-up ecosystem, where small groups take risks to develop ideas that eventually turn into profitable technology, than it is about any specific industry.”

Those Japanese who are familiar with Israel see it as a very advanced society, but most don’t know much about it. “When you sit them down and tell them, they begin to understand what Israel is all about.” But there’s a learning curve, Grossberg noted.

The conservative Japanese culture, which emphasizes respect for traditional ways of doing things, deference to seniority, and not standing out in the group, is in direct contrast to the Israeli start-up culture, which encourages questioning, exploring, and youthful ideas and styles. “Japan and Israel are like yin and yang, but their opposite sides complement each other,” said Grossberg.

Israelis have a lot to learn from the Japanese as well, he added. “The Japanese are very good at systematizing things, making things very efficient. They are also very big on perfection – they are not happy unless there are zero defects in whatever they put out. That is definitely something Israel could gain from. Israel has the creativity, while Japan has the power-up capacity and corporate resources. Working together would create great benefits for both countries.”

In addition, the Japanese are very resilient, as evidenced from their relatively successful recovery from the recent tsunami and earthquake tragedy.

Grossberg’s Start-Up Nation tour will take participants (about half Wasdea students and half businesspeople) to Yokne’am, to tour companies such as Given Imaging (creator of the “pill camera”), Mind CTI, and Nanometrics, and to Haifa’s Matam Research Park, where companies like IBM, Google, Philips, Microsoft, and many others have R&D facilities. The tour will also visit the Technion, Tefen Industrial Park, and several kibbutzim, where visitors will get a tour of Israeli agricultural and environmental advances.

And one day soon, Japanese companies will be among those who have R&D facilities in places like Matam Park, said Bornstein. “Make no mistake, Japan is a very advanced country and comes up with many amazing innovations each year. They don’t do it like Israel, with four kids in a garage who build a company and sell out, but in the context of their corporations.”

And they are also wise enough to know that, despite their preference for traditional ways of doing things, they need to take into account changes. And Israel’s accomplishments in R&D is one of those changes. They may not be overly impressed with the average start-up, but when multinationals set up shop in Israel, that’s a different story.

“The Japanese are beginning to understand that they need to be here,” said Bornstein. Assuming things remain stable in Middle Eastern politics — a major issue for the politically sensitive Japanese, said Bornstein — “I have no doubt that in another decade they will all be here.”

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