You may think Japan's IT industry issues are a recent phenomenon. After all, Japan has produced many great technologies since the 1980s, from the Walkman to PlayStation, from digital cameras to countless video games. However, the challenges in Japan's software and startup sectors have deeper roots. In this article, I'll explore the historical context, cultural factors, and structural issues that have shaped Japan's IT landscape, drawing from my personal experiences and observations. By understanding these factors, I hope to shed light on why Japan's software industry has struggled to keep pace with global trends, despite the country's technological prowess in other areas.
Nothing New
Before I dive into my own story, it's important to provide some background on Japan's IT industry, including engineering practices, working conditions, and the startup ecosystem. This context will help you better understand the environment in which I operated and how you might fare in similar circumstances.
Engineer Shortage
One of the most striking observations I've made at startup events in Japan is the lack of Japanese engineers. Most of the engineer attendees are expats, while Japanese attendees are predominantly business people. As a software engineer, I found this concerning. I know there are many talented engineers in Japan, so why aren't they attending these events?
Upon further investigation, I discovered that most Japanese engineers prefer stable jobs and are reluctant to take the risks associated with working in startups. You'll hear about risk a lot in Japan. The society is very risk-averse, and following the real estate bubble burst in the 1990s, Japanese people have become increasingly cautious about their future. The younger generation, having grown up in a stagnant economy, is more cautious than ever.
As the world increasingly shifts from hardware-first to software-first approaches, Japan's software development is lagging behind. Surprisingly, this is not a new problem. Delving into the New York Times archives, I found the first mention of such an issue in Japan dating back to 1986. Japan Tackles Software Crisis mentioned efforts to reform the software sector:
'Software is different,' said Kazuo Kimbara, who heads the Lotus Development Corporation's subsidiary here. 'The creativity is more important than the control.'
Japan recognized this problem in the 1980s, well before most of the world had widespread access to computers. Yet, the issue persists.
In a 1992 New York Times piece titled Software -- Japan's Little Nightmare-in-the-Making, Japan's issue with customized software was highlighted:
The lack of success in packaged software results as much from structural problems in Japan's computer and software industries as from any lack of creativity.
Japan has attempted to address this issue multiple times, but it seems the problem continues to persist. This leads to my next point.
You Have to Go Through the SI
System Integrators (SI) are key players in Japan's IT industry. The dominance of SI complicates the startup scene in Japan. From government to big corporations, they all rely on SI to build their systems. Since I'm not a fan of SI, I've never worked with them. If you'd like to learn more about SI, here's an excellent article on the subject: System Integrators – the Key to Success for SaaS in Japan
... as the asymmetric power relations and bargaining positions persist amongst corporates SI-ers and outsourced products (including SaaS startups), the flow of IT talent, that is, the ability for corporates to bypass SI-ers and make sound judgements on IT procurement, management and strategy will continue to be greatly limited.
You Are In Charge Now
Japan typically employs a top-down approach in almost everything, where leaders make decisions and others follow. This applies to innovation as well. Japanese organizations and corporations are not known for fostering innovation. When they need to innovate, they often appoint someone within the organization who may have zero experience in the field and put them in charge of innovation.
The same approach is evident in startup programs. Japan has numerous startup initiatives, such as the Shibuya Startup Support Program, with many specifically targeting foreign entrepreneurs. However, most of these programs fall short of actually promoting a startup culture. Instead, they often devolve into PR events, with support primarily focused on navigating bureaucratic hurdles. While this is undoubtedly important, it's not the only thing a startup needs.
In large Japanese corporations, it's not uncommon to find a team leader with little to no IT experience leading a team of engineers. With less technical knowledge than their team members, these leaders can offer minimal technical guidance. Their role often revolves more around dealing with internal bureaucracy and office politics.
One Wrong Move, and You Are Out
As mentioned earlier, Japan has a risk-averse culture, and this extends to career paths. Everyone follows the career trajectory laid out by their company. If you happen to miss a step, it could potentially mean the end of your career, with little chance of recovery (with some exceptions). This is why most career-minded Japanese professionals are unwilling to take risks. If your project fails, it's seen as a personal failure, and failure is often not an option in Japanese corporate culture.
This Is Just History
What I've outlined, and what I'm about to write about in the upcoming series, are only history. Whether the history continues to repeat itself or change for the better, I do not know yet. You still have the chance to build a better future in Japan.
Extra Anecdote
I had the opportunity to speak with an expat dev shop owner in Japan who makes a living working for small Japanese startups. His strategy involves attending startup events and talking to Japanese founders. If he learns that a startup has recently secured funding, he approaches them to offer his services, knowing they likely have money to spend and may not yet have engineers on their team. He mentioned that he's been successfully employing this strategy for years.