Moms, Modesty Also Holding Back Japan’s Software Engineers

By Mayumi Negishi and Yuko Takeo

Why does Japan waste so much IT talent? The shortage of Japanese software engineers for tech startups has long been a puzzle in a land of 4G telecom networks and pioneering mobile social networking.

Excessive regulation, excessive modesty and excessively cautious moms were among the slew of explanations offered Tuesday by some of Silicon Valley’s hottest names at a Tokyo forum organized by Internet billionaire Hiroshi Mikitani’s new lobby group.

Mr. Mikitani is chief executive of Japan’s biggest Web-based retailer Rakuten and a leading figure on Prime Minister Shinzo Abe’s advisory panel on improving Japan’s competitiveness. Mr. Abe’s pledges to deregulate Japan’s regimented economy helped inspire a mood of optimism at the forum.

Among the keynote speakers looking to bring some entrepreneurial disruptiveness to Japan’s Old Guard at the New Economy Summit were Google Senior Vice President Andy Rubin and Twitter and Square co-founder Jack Dorsey.

The reasons cited for Japan’s surprisingly low number of software engineers willing to embrace the challenges of working for new IT ventures included the following:

1) Regulatory hurdles for new entrants

Mr. Mikitani argued that Japan is still overly fettered by irrational rules protecting vested interests, rewarding complacency and discouraging creativity. Some of Mr. Mikitani’s targets included regulations discouraging online sales of over-the-counter drugs and provision of online courses. “Outdated regulations squash new ideas, as would-be innovators give up,” he said. “If (NTT Docomo’s data service) i-mode hadn’t been constrained in the Japanese market, it would be dominating the global smartphone market right now.”

2) Limited focus of education

Students need to read more to hone critical thinking skills, and they need to travel, and learn foreign languages to understand global markets and gain confidence in a startup’s potential, panelists said. “University education in Japan is typically concentrated on one topic,” said Mr. Rubin, the developer of the Android mobile operating system. “I think a generalist is needed in all of us.”

3) Fear of failure

U.S. panelists, from Airbnb CEO Brian Chesky, who heads an online marketplace for renting real estate, to Uber Technologies CEO Travis Kalanick, who hooks up users with taxis, detailed the importance of experience gained from failure. They spoke of how investors saw entrepreneurs’ previous failures as valuable experience and a cue for taking rather than rejecting opportunities to invest more in subsequent ventures. In contrast, business creators in Japan spoke of angry and lecturing bankers. “I knew that one failure would mean no second chance,” said Katsujin Chao, general partner at venture capital firm DCM, looking back on his experience starting up Japan Communication Inc. “I wanted to become a different sort of venture capitalist,” he said.

4) Modesty

Talented Japanese engineers have plenty of good ideas for startups, but they balk at the prospect of acting on them. George Kellerman, a partner of early-stage investor 500 Startups, said the very suggestion of setting up a company typically generates the response, “Oh, no, I couldn’t do that.”

5) Discouraging mothers

Japanese panelists blamed a safety-first culture created in part by mothers’ lack of understanding of the opportunities provided by startups and an education system that encourages people to join Nikkei blue chip firms and marginalizes entrepreneurship. “You won’t believe how many brilliant engineers choose to do boring work for big companies,” said Yukihiro Matsumoto, creator of programming language Ruby. “And it’s not like they are getting paid a lot, either.”