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An aversion to risk has hindered Japan's attempts to replicate Silicon Valley's success as a hub of innovation, Prime Minister Shinzo Abe said during his visit to the US.
"Here in the US and Silicon Valley, risk-takers are respected," Abe told over 200 business leaders in Los Angeles on Friday. "This, I believe, is something that is most needed by Japanese businesspeople."
Abe spoke after C3 Energy Chief Executive Officer Thomas Siebel and Third Point CEO Daniel Loeb told the audience that entrepreneurship in Japan is held back by a fear of failure and a shortage of venture capitalists and angel investors.
Abe's comments to a US-Japan economic forum came on the last day of a week-long trip to the US that included a stop in Washington to meet with President Barack Obama and address a joint session of Congress. The 60-year-old prime minister, whose country is the world's third-largest economy, also spent a day in Silicon Valley, where he visited Stanford University and Facebook Inc., and took a ride with Tesla Motors Inc. Chief Executive Elon Musk.
Abe said he met during his trip with young Japanese entrepreneurs, who told him they preferred the weather and risk-taking culture of Silicon Valley over Japan.
Siebel, a former Oracle Corp executive, said Silicon Valley's culture tolerates failure as a byproduct of innovation. "In Japan, the issues associated with failure are just too high," he said on a panel with American and Japanese executives.
Loeb, the founder of New York-based hedge fund Third Point, said that Japan's markets are too illiquid and the venture- capital and angel-investor cultures are too underdeveloped to drive innovation. "Something to think about in the future is, how can Japan drive an entrepreneurial spirit?" he said.
